BoC: A hike could end up supporting the greenback too – ING

FXStreet Insights Team FXStreet

Economists at ING analyze the implications of a Bank of Canada (BoC) hike for the broader market and the Dollar.

Hawkish hold by the BoC

We think markets will watch the BoC decision with great interest today. Following the Reserve Bank of Australia rate hike yesterday, another hawkish surprise from a developed central bank in the run-up to the FOMC meeting could cause the revamp of some hawkish speculation, especially considering Canada’s economic affinity with the US.

Given the lack of other market-moving events today, a BoC hike could end up supporting the USD too. But we expect a hawkish hold – in which case the spill-over into the Dollar may not be very material given that should be insufficient to prompt markets to price out the implied chances of a Fed June hike currently embedded in the USD curve.

See – BoC Preview: Forecasts from six major banks, rates unchanged but hawkish bias

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FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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