Viraj Patel, Research Analyst at ING, suggests that after CAD’s Trump tariff-driven rollercoaster ride last week, the FX looks to have stabilised at the start of this week.
“Although we note that a degree of investor scepticism remains despite the exemption from US steel and aluminium tariffs ($/CAD 1M risk reversals continue to trade at their highest levels since May-17). The highlight today is a speech by BoC Governor Poloz – who may shed further light on the central bank's policy bias after a fairly ambiguous statement last week. Markets are 50:50 over the prospects of a May BoC rate hike – and this is probably fair for now given the uncertain US trade policy (and NAFTA) backdrop.”
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