- USD/CAD: On track to reach 1.31 end Q3 target on 25 bps hike and hawkish guidance by the BoC – Credit Suisse
Market news
12 July 2023
USD/CAD: On track to reach 1.31 end Q3 target on 25 bps hike and hawkish guidance by the BoC – Credit Suisse
Economists at Credit Suisse preview today’s Bank of Canada meeting and its implications for the CAD.
Quacking like a hawk
We expect the BoC to stay hawkish by hiking 25 bps and signalling willingness to do more via upward tweaks of GDP and CPI forecasts (April MPR CPI estimates were 2.5% YoY for Q423 and 2.1% YoY for Q424, whereas GDP was estimated at 1.1% YoY and 1.9% YoY respectively). We think markets will react by firming up near-term policy tightening expectations, with positive rate support implications for CAD.
We remain constructive on CAD and hold on to our end-Q3 1.3100 USD/CAD target.
See – BoC Preview: Forecasts from eight major banks, enough evidence to pull the trigger on another 25 bps rate hike
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