The George Davis Report: May 2023 Edition

By George Davis, CMT
Published May 8, 2023 | 8 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 recent BoC interest rate decision and whether CAD performance presents any concerns on the inflation front.

What you need to know:

1

Although the BoC kept interest rates on hold at 4.50% in April as expected, the balance of comments had a hawkish tilt.

2

They noted that moving inflation from 3% to their 2% target will be more challenging than prior declines, while pushing back against market pricing for rate cuts by year-end.

3

All told, it was a “higher for longer” message with a tightening bias that kept the door open for further rate hikes if required.

4

Some concerns have been raised recently about the potential for CAD weakness to create inflation and push the BoC toward additional hikes.

5

However, the BoC’s framework suggests that such fears are currently overblown.

For the trading range:

USD/CAD

Buyers

1.3200/1.3300

Sellers

1.3600/1.3700

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 twenty-two international awards in the FX, fixed income, commodity and emerging markets asset classes. George was also awarded Technical Analyst of the Year six times by the Technical Analyst magazine and once by the Canadian Society of Technical Analysts, in addition to being inducted into the CSTA Hall of Fame in 2017. George has a Bachelor of Commerce (Honours) from Concordia University, holds the Chartered Market Technician (CMT) designation and is a Managing Director of RBC Capital Markets.

BoCCADEconomyGeorge DavisHawkishInflationInterest RatesMarketRBC Economics