CAD flows: CAD firmer after BoC

CAD higher after the BoC meeting, with the BoC saying it’s too early to consider a rate cut. Yesterday the market was priced for around a 45% chance of an April rate cut. After the meeting this is now down to less than a 25% chance, and the CAD has benefitted accordingly. However, the move in 2 year spreads has been modest, so we wouldn’t expect a major USD/CAD decline. 10 year spreads still look USD supportive. So USD/CAD should hold above 1.35.