USD/CAD will remain capped at 1.1200-25 Quotes from Commerzbank Corporates & Markets: -CAD: Bank of Canada (BoC) is not facing a difficult decision today. It will remain firm in sticking to its neutral position and it has every reason to do so. In January it already lowered its inflation outlook while at the same time raising the growth outlook. Moreover the BoC signalled that the timing and direction of the next change to the policy rate will depend on how new information influences the assessment. -That clearly points towards BoC leaving rates unchanged. Inflation rose again in December and January so that the major concern of excessively low inflation has now become a minor one. In the meantime GDP recorded a surprise rise by an annualised 2.9% thus exceeding even the most optimistic market expectations. -In January the PMI rose to 56.8 points and also the labour market report was able to convince at the start of the year. Despite positive signals from the economy the BoC will remain cautious today. However, due to the recent rise in inflation it can abandon its overly careful approach and relax again. That means that the BoC does not pose a risk for CAD so that USD-CAD will remain capped at 1.1200-25.
Posted on: Wed, 05 Mar 2014 08:33:39 +0000