Don’t miss this month’s edition of the George Davis Report, where George discusses why the Bank of Canada will have to remain aggressive on the monetary policy front.
What you need to know
The Bank of Canada raised rates by 50bp at their April meeting – the largest rate increase since 2000.
Economic data since then – including CPI, GDP and employment – suggest that the BoC will have to remain as aggressive at their June meeting.
The Canadian dollar has been under pressure despite the expectation of higher domestic interest rates.
Other factors, such as broader USD direction and equity markets, are more important drivers of USD/CAD than interest rates at the moment.
The recent break above the 1.2950 level has important intermediate implications for USD/CAD.
For the trading range:
USD/CAD
Buyers
1.2750/1.2850
Sellers
1.3150/1.3250