Since the start of the year, there has been a notable increase in USD/CAD. Analysts at Commerzbank assess the outlook for the currency pair in anticipation of the upcoming Bank of Canada (BoC) meeting.
Can the BoC give the CAD a new boost?
The BoC’s interpretation of the inflation figures is likely to be pivotal in determining the next course of action. Considering its cautious stance in recent months and the evident progress in inflation, it seems improbable that the central bank will announce any imminent rate cuts in today’s meeting. This is particularly noteworthy as no new projections are expected to be released during this session.
Hence, my anticipation is that the BoC will affirm today its intention to wait for a more extended period, consequently delaying expectations of a rate cut. Failure to do so may result in increased pressure on the CAD. It’s worth noting that, considering the BoC’s notably hawkish stance last year, such a scenario is not our primary expectation.
