- BoC: 25 bps hike to drive CAD higher – Scotiabank
Market news
7 June 2023
BoC: 25 bps hike to drive CAD higher – Scotiabank
CAD is firmer ahead of the Bank of Canada (BoC) Interest Rate Decision. Economists at Scotiabank expect a hike to propel the Loonie.
Narrower spreads suggest CAD upside risk
We expect a 25 bps hike in the Overnight Target rate from the current 4.50%.
A somewhat hawkish hike (the policy statement is unlikely to shut the door definitively on more tightening) should put the CAD on course for the mid/low 1.33s at least.
Narrower, short-term US/Canada cash bond spreads already suggest some unrealized downside potential in USD/CAD which tighter BoC policy today may help achieve.
See – BoC Preview: Forecasts from six major banks, rates unchanged but hawkish bias
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