Won’t Chase USD/CAD lower Into BoC – Nomura

The Canadian dollar received positive economic indicators and rising oil prices, yet NAFTA worries are holding it back. And now, the loonie faces the rate decision by the BOC. While Poloz and co. are expected to raise rates the team at Nomura is skeptical.

Here is their view, courtesy of eFXnews:

Nomura Research discusses USD/CAD outlook into the BoC January policy meeting on Wednesday.

“We expect the BoC to raise interest rates at this Wednesday’s meeting. However, we continue to think that the risks are more finely balanced than the market prices, and given already elevated expectations would not chase the move lower in USD/CAD

Despite strong domestic data, uncertainty around the inflation generation process and the heightened sensitivity of the economy to interest rate increases continue to warrant a pragmatic approach from the BoC in our view. We remain short CAD/NOK,” Noumra argues.

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