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The Canadian dollar is waiting for the rate decision from the Bank of Canada. Is everything already priced in? Some won’t see Dollar/CAD moving lower. Here is another view:

Here is their view, courtesy of eFXnews:

Bank of America Merrill Research discusses USD/CAD outlook into the BoC January policy meeting on Wednesday.

We expect the Bank of Canada (BoC) to hike 25bp on  17  January to put the overnight rate target at 1.25%….

“Our call is that  the  BoC will follow through with a hike at the  January  meeting.  If delivered,  USDCAD  may sell off by  perhaps a vol  temporarily given  the event  is about 80% priced.

If BoC opts to wait given  NAFTA risks and remaining uncertainty regarding the data,  we think  USDCAD  could  potentially  rally by around 2% in a straight line. The tone of the statement will determine the extent of follow through, in our view.  

We  continue to  see upside risks to USDCAD  over the next several weeks…We are  highly  skeptical that the next month will be as favorably bearish USDCAD as the last,” BofAML argues.  

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