Any signs of BoC complacency can drive USD/CAD to Oct highs near 1.4000 – Credit Suisse
|As for today’s BoC decision, economists at Credit Suisse think markets can react to any signs of complacency in forward guidance by pushing USD/CAD to test the October highs close to 1.4000.
Forward guidance holds the key for the USD/CAD
“A lack of acknowledgment by the BoC today of the improved employment numbers or any sign of complacency, in general, could very rapidly lead to an acceleration higher in USD/CAD through 1.3800.”
“Conversely, evidence that the BoC is increasingly alert to the possibility that it might need to hike rates further would be seen as validating current market expectations and would likely result in more benign price action, with USD/CAD reversing part of yesterday’s spike.”
“We remain ready to anticipate further USD/CAD gains towards 1.4000 if the BoC were instead to embrace a more explicitly divergent policy stance vs the Fed.”
See – BoC Preview: Forecasts from seven major banks, leaving rates on hold
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.