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The pound to Canadian dollar exchange rate (GBP/CAD) could ease back from last week’s multi-year peak in the coming days as short-term momentum unwinds from overextended levels.
The pair reached 1.8915 on Friday - its highest since June 2016, just before the Brexit selloff - before losing steam as risk appetite stabilised.
While the broader trend remains firmly upward, GBP/CAD pullbacks of 300–400 pips are common within this structure, meaning dips toward 1.8730 would not threaten the wider uptrend and could attract renewed buying interest.
The recent GBP/CAD rally was driven by a brief spike in investor anxiety linked to U.S. regional bank concerns, which temporarily weighed on risk-sensitive currencies like the Canadian dollar.
Those fears have since eased, prompting a rebound across equity markets and helping CAD recover some ground.
The Canadian dollar is also drawing mild support from signs that U.S. President Donald Trump may be softening his stance on recently proposed 100% tariffs on Chinese imports.
With Trump and China's President Xi Jinping expected to meet in South Korea at the end of the month – and U.S.-China trade negotiators gathering in Malaysia this week – optimism over a new trade accord has helped steady sentiment.
Overall, GBP/CAD remains in a long-term uptrend, but the near-term bias favours consolidation after last week’s sharp rally.
Traders may look for a corrective dip toward 1.87 before positioning for a potential move to fresh multi-year highs.