Next week, the Bank of Canada will hold its monetary policy meeting. The analysts of TD Securities they expect a rate hike of 25 basis points, in line with the market consensus. They note that the Canadian dollar (CAD) may not receive much direction bias from the meeting.
“We expect the BOC to rise 25bp in January, and we anticipate this to be the last hike of this cycle (although the forward component will not rule out future hikes).”
“Although this is expected to be the last hike, the CAD may not receive much directional bias from this meeting as the curve may continue to be biased to look the other way in this interest rate cycle. That being said, the CAD may be more sensitive to any moderate items if the BOC emphasizes the BOS items. We see differentiated dynamics in crossovers given the risk correlations.”
Source: Fx Street
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