The economists of ENG analyze the implications of a Bank of Canada (BoC) rate hike for the market in general and for the dollar.
Perspectives on the performance of the BoC
We believe that the markets will watch the BoC’s decision with great interest today. Following yesterday’s Reserve Bank of Australia rate hike, another hawkish surprise from a central bank on the eve of the FOMC meeting could spark a revival of some hawkish speculation, especially given the affinity Canada’s economy with the US.
Given the lack of other events to move the markets today, a rise in the BoC could end up supporting the USD as well. But we do expect a pause with hawkish positioning, in which case the impact on the dollar may not be very large, as it should not be enough to prompt markets to price in the implied chances of a June Fed hike, currently. included in the USD curve.
Read: BoC Interest Rate Decision Preview: No change in June, rate hikes could return later in the year
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
