Canadian Dollar: BoC on hold keeps pair supported – BBH
Brown Brothers Harriman’s (BBH) Elias Haddad expects the Bank of Canada (BoC) to keep its policy rate unchanged at 2.25% for a seventh straight meeting, as core inflation near 2% allows policymakers to cushion activity against US-Canada trade tensions.
Brown Brothers Harriman’s Elias Haddad anticipates the Bank of Canada to maintain its policy rate at 2.25% for the seventh consecutive meeting, citing core inflation near 2% to justify inaction. Independent of US-Canada trade frictions, Haddad perceives market pricing of 75 basis points of BoC rate hikes over a year as excessive, indicating potential dovish adjustments that could propel USD/CAD higher towards 1.4000.
The Bank of Canada is expected to keep rates on hold at 2.25% for the seventh meeting in a row on Wednesday. Heightened US-Canada trade tension looms over Canada’s Q2 growth surge. Core inflation near 2% provides the Bank of Canada room to stay put and support economic activity. The Bank of Canada cautioned during its April 29th meeting that a significant new trade restriction from the United States could prompt further rate cuts to bolster economic growth.
Canada’s robust labor market, however, precludes a rate reduction. The August labor force survey is scheduled for Friday, with an anticipated job increase of 15,000 versus July’s 75,100, with the unemployment rate settling at a two-year low of 6.4%.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
