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ForexMediumUpdated•Originally published 9 July 2026•Updated 12 July 2026•
1 min read

GBP/CAD Hits Decade High on Monetary Policy Divergence and USMCA Pressures

A pillar with a crown sits on a Canadian flag base next to a book titled GBP/CAD Decade High on an orange background.

Key Facts

1GBP/CAD reached its highest level in a decade due to monetary policy divergence and structural headwinds facing the Canadian Dollar.
2Bank of England Governor Andrew Bailey effectively ruled out near-term rate cuts, supporting Sterling's strength.

Driven by a stark divergence in monetary policy paths between London and Ottawa, the GBP/CAD currency pair has surged to its highest level in a decade. This rally is primarily attributed to Bank of England Governor Andrew Bailey effectively ruling out near-term interest rate cuts, which has bolstered Sterling's appeal. Conversely, the Canadian Dollar is grappling with structural headwinds stemming from oil price volatility and mounting trade uncertainties linked to the USMCA framework.

These market moves coincide with mixed industrial performance data, as Canada's Manufacturing PMI recorded 53 in early July, missing the forecast of 53.4 per market data. Compared to other commodity-linked currencies, the Loonie faces additional pressure from trade-related shocks, while Sterling continues to benefit from reduced domestic political risks following the stabilization of the UK government under Keir Starmer.

Looking ahead, traders are closely monitoring a scheduled speech by Governor Andrew Bailey for further clues on the BoE's rate trajectory. Additionally, the Bank of Canada’s (BoC) Business Outlook Survey on July 6 will be a critical catalyst, as it may reveal the extent of the impact of trade pressures on Canadian firms and determine if the pair can sustain its momentum at these multi-year highs.