The economists of Scotiabank They report that the CAD rises thanks to the strong momentum of the economy.
The recent tightening of spreads between the US and Canada should help curb CAD weakness
Canada’s GDP data released yesterday reflected an economy that retains great momentum. First quarter GDP was stronger than expected (and well above BOC forecasts). Monthly data showed that activity in March held up better than expected, with early signs of a firm rise in April. This should tilt the risks more clearly towards our claim that an additional 25 basis point hike by the BoC is warranted.
Firm economic data and the recent tightening of US-Canadian spreads should help curb CAD weakness and boost it a bit in the near term.
Source: Fx Street
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