1.80 At Risk This Week

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The Canadian dollar is preferred to sterling as long as the Iran crisis continues to pressure oil prices.

The pound-Canadian dollar exchange rate opens the new week softer at 1.8167 as it continues 2026’s journey southward.

The latest driver of GBP/CAD weakness is the Iran conflict which has pushed global oil and gas prices higher and aided petro-currencies, such as CAD.

“The loonie has held up well since the start of the Iran conflict, ranking as the best-performing major currency in Bloomberg’s grouping and one of only two to have appreciated against the U.S. dollar over that period,” says a new forecast note from National Bank of Canada (NBC).

“Among the IMF’s main reserve-currency economies, Canada stands out as the country with the largest net energy balance relative to the size of its economy, equivalent to a hefty 4.4% of nominal GDP,” says NBC.

As long as oil and gas prices remain elevated, we would expect the Canadian currency to march onwards against sterling.

GBP/CAD has fallen below the major technical moving averages and is in a comfortable downtrend, and we would view last week’s low at 1.8021 as the objective for bears to chase.

Below here is the big 1.80 level, which can also be tested in the coming days. The Relative Strength Index is at 33 and is pointed lower, confirming momentum is firmly to the downside, and we see little reason to stand in the way of what is an increasingly well-defined trend.

Markets start the new week hoping that more shipping will make it through the Strait of Hormuz as various countries strike bespoke deals with Iran to allow for transit.

However, this won’t be acceptable to U.S. President Donald Trump, who will try to guarantee the safety of all shipping by force, something that should ensure there’s no imminent end to the crisis.

This simply creates a backdrop that is consistent with ongoing GBP/CAD weakness.