BoC rate hike seems increasingly likely - Westpac

Sandeep Kanihama FXStreet Contributor

A BoC rate hike at their next meeting 12 July seems increasingly likely, BoC Governor Poloz reiterating that the 2015 rate cuts have done their job, points out Richard Franulovich, Research Analyst at Westpac.

Key Quotes

“Markets had trimmed the probability of a 12 July hike to 35% after last week’s soft CPI but have since rebuilt the odds to 60%. Soft inflation will not alter the Bank’s assessment that the recovery is broadening across regions and sectors, that the adjustment to the oil price fall is mostly complete and that the case for leaving insurance has waned. Low inflation will instead be a key factor that shapes the pace/profile of any future hikes beyond unwinding insurance.”

“USD/CAD looks set to take out 1.30 in coming days enroute to a retest of the May 2016 lows around 1.25.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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