USD/CAD: Scope For A More Hawkish BoC This Week; Staying Short – Credit Agricole

The Canadian dollar faces the BOC’s last decision of the year. How will USD/CAD react? Here is the view from Credit Agricole:

Here is their view, courtesy of eFXnews:

Credit Agricole CIB FX Strategy Research discusses USD/CAD outlook into the BoC meeting this week.

“For the CAD the focus this week on the BoC meeting on Wednesday. A positive set of economic data has boosted CAD and, in our view, the chances of a BoC hike in January…

We thus expect a fairly constructive tone from the BoC this week with any concern about NAFTA negotiations offset by domestic wage data. The market is till pricing in a less than 50% chance of a January hike which suggests scope for Canadian front-end yields to turn more supportive for the CAD,” CACIB Research argues.

In line with this view, CACIB Research remains short USD/CAD* from 1.2770 targeting a move towards 1.2300, with a stop at 1.2925. 

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