CAD: Guided lower from dovish BoC - ING

Sandeep Kanihama FXStreet Contributor

A ‘dovish’ BoC statement – with the central bank taking a more cautious stance on future rate moves – explains CAD’s sharp post-meeting move lower, according to Viraj Patel, Foreign Exchange Strategist at ING.

Key Quotes

“Tailwinds still remain for the loonie – not least a NAFTA deal, which media reports suggest could be reached within 3 weeks. But a key take-away from yesterday’s BoC meeting was that the central bank will not adopt a ‘hike on NAFTA deal’ policy approach; Governor Poloz noted that investment or export data may need to recover for the BoC’s conviction over a near-term rate hike to pick up.”

“We don’t think the BoC was as ‘dovish’ as the initial CAD reaction suggests – noting the upward revision to Canada’s potential growth rate. $/CAD closing the week below its 200-DMA (1.2625) would be a bearish confirmation.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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