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Richard Franulovich, head of FX strategy at Westpac, points out that the BoC’s rate cut pricing remains very guarded with only 11bp in cuts priced to Dec 2019, less than the Fed (-64bp), the RBNZ (-40bp), the RBA (-22bp), the ECB (-16bp) and even the SNB (-18bp) and the BoE (-14bp).

Key Quotes

“Firming inflation and a decent BoC biz survey will encourage the BoC next week to reiterate an optimistic tone but global risks have grown and the Bank may amplify these concerns.”

“CAD the strongest G10 currency in June but prospects for further USD/CAD declines face tougher technical resistance into 1.3000, the area coinciding with a range of key supports.”