CIBC Research expects the Bank of Canada (BoC) to stay on hold at its policy meeting on Wednesday, and to stress the policy divergence between Canada and the US.
“The BoC already had bullish forecasts for near-term growth, so there’s no need to hint at any changes to those projections in this non-MPR statement. Expect Poloz to continue stressing the differences between Canada and the US as he keeps interest rates on hold,
…In this week’s statement Governor Poloz will likely once again alert investors to differences between the US and Canadian economies, explaining why rates here remain on hold while the US hikes,” CIBC argues.
On CAD front, CIBC expects only a modest CAD appreciation, with USD/CAD reaching 1.34 by year-end but with CAD underperforming other majors.
Source: CIBC Economics – CIBC Capital Markets
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