USD/CAD: BoC's tapering announcement not enough to drive a new CAD rally – ING
|The Bank of Canada (BoC) meeting week might prove to be a catalyst for an upside correction in USD/CAD, in the view of economists at ING. They suspect that the BoC may fall short of explicitly endorsing the current market pricing.
BoC to taper, but may fall short of aggressive tightening expectations
“The rally in CAD is looking quite tired, and we expect to see more support in USD/CAD around the 1.2300 level.”
“We do expect the BoC to deliver another round of tapering – cutting weekly purchases from CAD2 B to CAD1 B – but that is a move that is likely fully priced in. The main market focus will be on the forward-looking language, and here we suspect that the Bank may simply reiterate they expect the first hike in 2H22, hence falling short of the market’s aggressive tightening expectations.”
“With the USD correction now past us, we see the balance of risks clearly tilted to the upside for USD/CAD next week.”
“August GDP data released two days after the BoC meeting may provide only a small help to CAD.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.