CAD: ‘Buy The Rumor, Sell The CAD’ – Credit Agricole

The Canadian Dollar is awaiting the verdict from the Bank of Canada but we already know they will raise interest rates. What’s next for the loonie?

Here is their view, courtesy of eFXdata:

Credit Agricole CIB discusses CAD outlook around tomorrow’s BoC July policy meeting.

“With markets pricing in close to 80% probability of the BoC hiking this week, we see limited currency upside risk, at least in the short term. This is largely due to the view that the central bank may consider a “dovish hike”, which could easily lead to a ‘sell-the-fact’ reaction in the currency.

This makes sense when considering that trade-related uncertainty still calls for some caution, even though the central bank has stressed politics has only a marginal impact on the decision-making process,” CACIB argues.

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