Wage Growth Trends
Wage growth showed signs of slowing, with average hourly wages increasing 3.7% year-on-year in December, down from 4.0%. The Bank of Canada is expected to keep interest rates steady through much of 2026, as the latest data complicates the outlook for a rate hike. In the UK, focus shifts to upcoming economic releases, including labour-market data and the GDP report. The interest-rate differential between the Bank of Canada and the Bank of England continues to support the Pound. The Canadian Dollar is also influenced by global oil supply concerns. Increased oversight of Venezuelan oil by Washington may affect oil prices, impacting the Canadian Dollar, given Canada’s role as a key energy exporter.Pound vs Canadian Dollar
That trend of a weakening labour market we saw in early 2025 continued throughout the year. Statistics Canada’s latest report from last week shows the unemployment rate has now drifted up to 7.2%, creating a difficult situation for the central bank. This ongoing economic softness limits the BoC’s ability to raise rates further, even as inflation remains just above its target range. The interest rate differential that favored the Pound a year ago remains a key factor for GBP/CAD. With the Bank of England’s policy rate now at 3.5%, the 50-basis-point spread over the BoC continues to support carrying the Pound against the Canadian dollar. This fundamental backdrop suggests that holding long GBP/CAD positions remains an attractive strategy. Concerns about oil oversupply that we noted in early 2025 have since eased. Stronger than expected global demand has pushed WTI crude prices back up to around $85 a barrel, a level not seen since late 2024. This provides a supportive undercurrent for the Loonie and may cap significant upside in the GBP/CAD pair. สร้างบัญชี VT Markets ของคุณ และ เริ่มการซื้อขาย ตอนนี้.
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