GBPCAD definition

GBP/CAD tracks the British pound against the Canadian dollar, showing how many Canadian dollars one pound will buy. It is a cross rate, traded directly rather than through the US dollar, linking a European major to a North American commodity currency. Liquidity is moderate, with spreads wider than the dollar majors, and the pair has no common nickname.

The British pound is the base currency and the Canadian dollar the quote currency, so a quote of 1.7300 means one pound is worth 1.7300 Canadian dollars. A rising price means the pound is strengthening against the loonie, a falling price the reverse. You trade GBP/CAD as a forex CFD, taking a position on the price rather than exchanging currency outright: go long if you expect the pound to rise, short if you expect it to fall. Moves are counted in pips at the fourth decimal place, and your result is the pips gained or lost multiplied by your position size.

Two forces pull this pair in opposite directions: UK monetary policy and politics on the pound side, and the crude oil price on the Canadian side. Because Canada is a major oil exporter, a rally in oil tends to lift the loonie and drag GBP/CAD lower, while Bank of England decisions and UK growth or inflation surprises drive the pound leg. The gap between the Bank of England and the Bank of Canada sets the underlying rate differential.