The Canadian dollar was beaten by Poloz. He is preoccupied with low inflation and the pace of rate hikes is set to slow down. And when will it come?
Here is their view, courtesy of eFXnews:
CIBC Research comments on today’s speech by BoC Governor Poloz.
“In a speech to a St John’s audience, the BoC head highlighted that he’s aiming to proceed “cautiously” with more hikes, despite what’s been more aggressive pricing from the market and what was perceived as a hawkish September statement. That’s because household debt levels “amplify” the impact of the tightening he’s already introduced, while the strengthening C$ “complicates” the inflation outlook.
…All told, the majority of the speech confirms our assumptions that tightening from the Bank of Canada will be a gradual affair from here, with our estimate being that the next move will have a 2018 time stamp.
Bearish for the C$ which we see weakening by a few more cents (see here) by the end of this year, and bullish for the front end of the Canadian curve,” CIBC argues.
For lots more FX trades from major banks, sign up to eFXplus
By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.