The George Davis Report: February 2022 Edition
By
George Davis, CMT
Published February 14, 2022
|
7 min watch
A monthly video series on the trajectory of the Canadian dollar
Don’t miss this month’s edition of the George Davis Report, where George discusses the implications of a more hawkish Bank of Canada.
The BoC delivered a more hawkish message at their January meeting, effectively preparing the market and Canadian public for higher interest rates ahead.
While Governor Macklem framed it as a “significant” policy shift, he emphasized that the Bank would take deliberate steps in the hiking process and communicate clearly.
Every meeting will now be “live”, but deliberate steps suggest that 50bp hikes will not be seen in the early portion of the tightening cycle.
While RBC Economics is looking for a terminal rate of around 1.75% in 2023, we believe that current market pricing is too aggressive.
A repricing of Canadian and US rate expectations may present near-term downside risks for USD/CAD, but longer-term upside risks.
For the trading range:
USD/CAD
George Davis, CMT
Chief Technical Strategist, Fixed Income, Currencies & Commodities, RBC Capital Markets
With over 30 years of market experience, George Davis is responsible for RBC’s Canadian dollar forecasts as well as intermarket technical analysis research that covers the FX, fixed income and commodity asset classes. Prior to this, he was a Vice President on RBC’s spot Canadian dollar and forward foreign exchange desks in Toronto and a foreign exchange Dealer in Montreal.
His technical research has been recognized via nineteen international awards in the FX, fixed income, commodity and emerging markets asset classes. George was also awarded Technical Analyst of the Year five times (in 2010, 2013, 2017, 2018 and 2019) by the Technical Analyst magazine and in 2016 by the Canadian Society of Technical Analysts, in addition to being inducted into the CSTA Hall of Fame in 2017.
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