From CBA (Commonwealth Bank of Australia) today:
We recommend investors buy GBP/CAD near current levels (2.0150) with a stop loss at 1.9800 and a target of 2.1000.
Diverging monetary policies between the UK and Canada suggests GBP/CAD will edge higher over the next few months
- The risk is the BoC cuts interest rates. Canadian consumer spending growth is likely to disappoint in the coming quarters.
- In contrast, the risk is the BoE lifts rates earlier than money markets anticipate. UK domestic demand remains robust.