The Bank of Canada raised rates and also pushed forecasts and expectations higher. USD/CAD tanked. Can the C$ continue higher?
Here is their view, courtesy of eFXnews:
Nomura Research continues to look for another BoC rate hike by December after the central bank raised the target for the overnight rate by 25bp to 0.75% at its July 2017 meeting.
“From here, we are of the opinion that the BoC’s positive tweaks to its growth outlook and cautious optimism that inflation will pick-up points to further, albeit gradual, policy normalisation over time,” Nomura argues.
Fundamentally, this monetary policy impulse should continue to underpin the CAD.
And based on the still-robust momentum in the underlying economy and Canadian labour market, we would look to sell USD/CAD on rallies up towards 1.30 in the near term,” Nomura advises.
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