BoC: CAD impact may be positive but quite limited – Barclays

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In today’s session, the highlight will be the latest policy decision from the Bank of Canada. The economists at Barclays Research expect CAD impact to be slightly positive.

CAD remains first and foremost a risk trade

“We expect some CAD upside on a 25 basis point hike from the Bank of Canada that is not fully priced in. However, CAD gains from undervalued BoC rallies in the past have been modest and short-livedand sustained gains depend on the background of risk.”

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“Beyond the tactical considerations surrounding this week’s meeting, CAD remains first and foremost a risky trade. Consequently, sustained gains against the dollar, in particular, will likely require the S&P 500 index to catch up with equity markets abroad.”

Source: Fx Street

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