USDCAD View: FXWW

From the FXWW Chatroom – It is Bank of Canada time and outside consensus is for higher USDCAD. It all started yesterday, unconfirmed talks of BoC dovish hike, and this is the view of other Canadian banks. We at CIBC are maintaining our view that no ‘major changes in the growth outlook overall, with the BoC not going to take a guess on trade barriers that have yet to be announced.’ Yet even if growth expectations remain largely unchanged we can expect the text of the rate statement to make the case for higher rates, that message is not only for the market but for the wider populace. Our strategist Bipan sees a retracement to sub-1.30, our trader Jon said 1.28 tomorrow.
they said earlier in the opening note…. USDCAD rallied to 1.3155, retraced little as the AUD recovered. It is Bank of Canada rates decision day –market is positioned short CAD in to BoC, our call is 25 bps hike and hawkish statement. Our macro strategist, Bipan Rai said near-term momentum will likely extend lower given market positioning. A retracement to sub-1.30 offers an opportunity to lock into strategic longs. A move towards the 1.2850ish area is a gift.
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