USD/CAD: What’s The Post-BoC Trade? – Nomura

The Bank of Canada raised rates and also pushed forecasts and expectations higher. USD/CAD tanked. Can the C$ continue higher?

Here is their view, courtesy of eFXnews:

Nomura Research continues to look for another BoC rate hike by December  after the central bank raised the target for the overnight rate by 25bp to 0.75% at its July 2017 meeting.

“From here, we are of the opinion that the BoC’s positive tweaks to its growth outlook and cautious optimism that inflation will pick-up points to further, albeit gradual, policy normalisation over time,” Nomura argues.

Fundamentally, this monetary policy impulse should continue to underpin the CAD.

And based on the still-robust momentum in the underlying economy and Canadian labour market,  we would look to sell USD/CAD on rallies up towards 1.30 in the near term,” Nomura advises.

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