Today, the Bank of Canada (BoC) is set to release its quarterly Business Outlook survey. A strong reading could drag the USD/CAD pair down to test the 1.2450/30 support, economists at ING report.

Building expectations of a 50bp hike from the BoC next week

“Strong readings for sales, employment, investment, and inflation expectations could build expectations of a 50bp hike from the BoC next week – a 44bp hike is currently priced.”

“Expect the Canadian dollar to stay well supported on the crosses (e.g. versus the Japanese Yen) and USD/CAD could retest strong support at 1.2430/50 if the Outlook survey is strong enough.”