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- USD/CAD to target 1.30 on a firm BoC stance – Credit Suisse
USD/CAD to target 1.30 on a firm BoC stance – Credit Suisse
Economists at Credit Suisse hold a 1.30 USD/CAD target ahead of today’s Bank of Canada (BoC) rate decision. They do not expect the BoC to alter its assessment of housing risks, but markets will be on the lookout for dovish hints.
BoC unexpected to alter its assessment of housing risks
“In the more likely event of a firm BoC stance, we still would be inclined to maintain a neutral stance on CAD, in line with our 1.30 USD/CAD target.”
“The area that could offer more surprises is how the Governing Council addresses the topic of housing prices. Markets might see changes in the language on this front as potentially dovish. We do not anticipate a shift from the BoC on this topic, but we are alert to the fact that if it were to happen, it would be seen in markets as an idiosyncratic CAD-negative factor consistent with a partial unwind in BoC tightening expectations. Under these circumstances, a break in USD/CAD above the 1.3084 highs from last week would become a much more likely and imminent proposition.”
Also read: BoC Preview: Forecasts from nine major banks, hiking interest rates aggressively
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