The loonie edged slightly higher ahead of data forecast to show inflation ticked up. Investors will then turn their focus to the Bank of Canada’s policy decision in which policy makers are widely expected to announce the tapering of asset purchases.
USD/CAD +0.1% to 1.2601; fell as much as 0.2%; the loonie is stronger than most Group-of-10 peers
Scotiabank’s Shaun Osborne and Juan Manuel Herrera are watching whether policymakers opt to taper from the current CAD4bn/week to CAD3bn/week
Such a move should help support the loonie, they said, noting that they expect “the language of the policy statement and MPR to try and soften the impact” of a tapering decision
CIBC’s Bipan Rai said a convincing break of the 1.2650 level would be a possible signal of a new trading range, and recommends establishing longs there to target 1.30
The 2020 trend of unanimous global monetary and fiscal support is fraying as countries move to pursuing their individual priorities and as the pace of recovery diverges. Canada’s commodity and housing markets are firing on all cylinders so it is logical that they will begin to think about how to ease back from outsized assistance earlier than other countries.Click HERE to subscribe to Fuller Treacy Money Back to top