BTMU FX Strategy Research notes that the most abrupt change has occurred in expectations for BoC monetary policy where the Canadian interest rate market has shifted over the past month to price in more than a 50:50 chance of a hike at their next meeting on the 12th July.
“The developments support our view that USD/CAD is likely to break back below the 1.3000-level before year end.
However, we do not believe that it is a done deal that a rate hike will be delivered as early as at their next meeting which could create some more two way price risk for the loonie in the month ahead,” BTMU argues.
Source: BTMU Research
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