CommunityPublished: 2024-12-10T16:40:45.000Z
Bank Of Canada 50bps on Wednesday?
MG
by Mike Gallagher
Director of Research
Macroeconomics and Strategy
16
CAD focused on BOC, but limited upside scope.
The BoC is priced as 90% certain to produce a 50bp rate cut, so it would be quite a major surprise if they were only to move 25bps. Tuesday saw USD/CAD hit its highest since June 2021, with the USD getting something of a boost from the very strong NFIB survey of small businesses. However, it is a little early to assume that this is going to prove an accurate assessment of business prospects, as it seems very likely to have been affected by the election. USD/CAD remains broadly in line with yield spread moves, so we wouldn’t expect a major move lower from here unless US CPI comes in well below expectations.
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