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The Bank of Canada (BoC) rate decision on 3 June will mark the first day on the job and the first rate decision for the new Governor Tiff Macklem as he takes over from Governor Poloz. Economists at Rabobank believe that the policy rate will be left at 0.25% while have revised down the USD/CAD 3-month forecast to 1.42. Goldman Sachs expect the USD/CAD pair trading at 1.40 in 3 months.

Key quotes of Rabobank

“We expect the Bank of Canada to leave the policy rate unchanged at 0.25% on Wednesday, June 3rd. This is fully expected by both analysts (Bloomberg survey) and traders (CAD OIS).  We expect the policy rate to remain at 0.25% at least through 2020 and 2021.” 

“The break below 1.3830 in USD/CAD has broken the recent range but we are reticent to call the pair trading much lower from here despite the equity rally looking to have legs in the short-term.”

“We now expect USD/CAD to trade at 1.38 on a 1-month horizon 1.42 on a 3-month horizon down from 1.44 and 1.46 respectively.”