GBP to CAD Forecast - July 2025

What’s moving the pound and the Canadian dollar?

Several key factors are influencing the GBP/CAD exchange rate in July:

Interest rate differentials

• The UK currently has a higher interest rate (around 4.25%) than Canada (2.75%), which usually helps support the pound.

• However, the Bank of Canada has paused further rate cuts, which has helped the Canadian dollar maintain some strength.

Oil prices and the Canadian dollar

• Oil prices have risen sharply due to tensions in the Middle East, particularly Iran's threats to disrupt major oil routes.

• As Canada is a significant oil exporter, rising oil prices tend to strengthen the Canadian dollar (also known as the Loonie).

Mixed signals from the UK economy

• Positive economic indicators like strong construction sector performance gave the pound a temporary boost.

• But broader concerns, such as sluggish trade and anticipated interest rate cuts from the Bank of England, are limiting upward momentum.

Canada’s economy: weak in parts but resilient

• Canada is facing rising unemployment and other economic challenges.

• However, strong recent job data and easing trade tensions with the U.S. have prevented major losses for the Canadian dollar.

What’s likely to happen next?

Short-term outlook (next few weeks)

• The GBP/CAD rate may dip slightly toward the 1.83–1.84 range due to strong oil prices and short-term chart patterns (including a possible “double top” around 1.87).

• For those sending money from the UK to Canada soon, this could mean receiving slightly fewer Canadian dollars per pound.

Medium-term outlook (next 4 to 6 weeks)

• Many analysts still expect the pound to strengthen overall against the Canadian dollar, potentially reaching 1.90 later this summer or by early autumn.

• That level hasn’t been seen in nearly a decade and would result in a more favorable exchange rate for UK-based senders, but it may take time to materialize.

Key price levels to watch

These price points offer insight into what could happen next with GBP/CAD:

• Resistance (upper ceiling): 1.87 – the exchange rate has repeatedly failed to break above this level.

• Support (short-term floor): 1.83 – if the pound drops to this level, it may bounce upward again.

• Longer-term target: 1.90 – this is a realistic level if the CAD weakens or UK economic data improves.

Risks to watch out for

There are several events that could shift the current outlook:

• A major spike in oil prices, especially due to conflict or supply disruptions, could strengthen the CAD and reduce the GBP/CAD exchange rate.

• Negative UK economic data or an earlier-than-expected interest rate cut by the Bank of England could weaken the pound.

• If the Bank of Canada resumes cutting rates in July (still a possibility), it would likely weaken the CAD and benefit GBP.

Is it a good time to convert GBP to CAD?

Here’s how to think about your next transfer, depending on your direction:

Sending GBP to Canada?

If you're able to wait, the exchange rate may improve after a short-term dip. The rate could climb later in July or into August.

Sending CAD to the UK?

Now may be a better time to act. The Canadian dollar is currently supported by higher oil prices and stable interest rates.

Live GBP to CAD exchange rates

Converting GBP to CAD

If you are planning to send GBP to Canada, you need to pick the right money transfer company to get the most CAD on the other end.

Depending on your needs, it's best to use one of the following companies in July:

*Based on our data of £6,000 transfer from the UK to Canada in July 2025. For other amounts, please run a live search to get the best exchange rate.

History of the GBP to CAD pair

The GBP/CAD pair has had a long history due to the close trading relationship between the UK and Canada. They both are western allies and members of the G7, G20, OECD, and other organizations.

The British pound was first introduced in 1,489 and was the most used currency for centuries. It was also used in most British colonial countries, including Canada which shifted from sterling to the Canadian dollar in 1,858.

The Canadian dollar has done better than the British pound over the years as the role of the UK in global affairs has diminished. Indeed, the GBP to CAD pair has dropped from a high of 2.8 in December 1980 to the current 1.61, which is a ~44% decline.

The British pound has struggled because of the rising challenges faced by the country. In 2016, the country voted to leave the European Union (EU), its biggest trading partner but this resulted in struggles faced by several core sectors in the country. For example, the automobile sector which employed millions of people has shrunk as the number of cars manufactured in 2022 dropped to the lowest point since the 1950s.

On the other hand, Canada has benefited from its close relationship with the United States and the robust energy markets. It has emerged as a top player in other commodities like gold and silver; and is the fourth-biggest oil producer in the world after the US, Saudi Arabia, and Russia. The chart below shows the performance of the GBP/CAD pair since 1975.

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