Jane Foley, Senior FX Strategist at Rabobank, points out that the BoC is the third G10 central bank to have already tested the water by hiking interest rates this year and suggests that the timing of the next move is expected to be very data dependent but our base case is that the BoC will wait until Q2 before raising rates again.
“By that time we will have more data revealing how households have coped with the 50bp of tightening seen in 2017 H2 and we should also have more clarity as to the outcome of NAFTA negotiations following the 6th round in late January and the final 7th round in March. We expect USD/CAD to hold a choppy range through 2018.”
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