Today’s Bank of Canada (BoC) decision is likely to be a close call. In case the central bank leaves the policy rate unchanged at 0.25%, USD/CAD could offer an occasion to go tactically short, in the view of economists at Credit Suisse.

USD/CAD targets 1.2500 

“We continue to think that the decision will be a very close call, but overall we anticipate the BoC delivering a 25bp hike. The alternative most likely outcome to an outright rate hike is one in which the BoC does not hike but instead moves towards a more aggressive forward guidance. Other, more dovish, scenarios still seem unlikely.”

“In the event of an unchanged outcome, USD/CAD rallies to 1.2738 will offer a good entry point for more tactical minded shorts aimed at our 1.2500 target.”