BoC Preview: CAD may face yet more pressure – ING

The Bank of Canada (BoC) announces monetary policy today. Economists at ING analyze Loonie’s outlook ahead of the decision.

BoC to hold, downside risks for CAD

A hold today is widely expected, so markets will primarily focus on the content of the monetary policy report. Despite likely attempts by the BoC and Governor Tiff Macklem to keep the hawkish narrative going, some downward revisions to the growth figures may open a window for CAD bonds to rally after the meeting, with the Loonie underperforming.

USD/CAD does not look like a screaming sell as it did back in early September, and we see more upside risks to the 1.38/1.40 area before converging to our year-end 1.36 target.

See – BoC Preview: Forecasts from nine major banks, keeping rates on hold and prospect of further hikes alive