Since the Bank of Canada's most recent survey indicates little urgency for immediate easing, the USD/CAD exchange rate is still rangebound between 1.3550 and 1.3800. According to BBH FOREX experts, solid hiring intentions and stabilized inflation keep markets wary of any short-term rate reduction, even though future sales projections have decreased.
BoC survey indicates a halt
"The USD/CAD price action is probably going to remain in the multi-week range of 1.3550 to 1.3800. There is no convincing argument for additional easing in the BOC's Q2 Business Outlook Survey. Although the outlook for export sales improved, the firm's indicator of future sales dropped to a one-year low of 6 from 13 in Q1.
"In the meanwhile, most businesses intend to maintain stable employment and keep inflation expectations within the Bank's target range. The swaps curve still indicates an 80% chance of a final 25bps cut within the next 12 months and less than 10% chance of a 25bps cut at the next July 30 meeting.
BoC survey indicates a halt
"The USD/CAD price action is probably going to remain in the multi-week range of 1.3550 to 1.3800. There is no convincing argument for additional easing in the BOC's Q2 Business Outlook Survey. Although the outlook for export sales improved, the firm's indicator of future sales dropped to a one-year low of 6 from 13 in Q1.
"In the meanwhile, most businesses intend to maintain stable employment and keep inflation expectations within the Bank's target range. The swaps curve still indicates an 80% chance of a final 25bps cut within the next 12 months and less than 10% chance of a 25bps cut at the next July 30 meeting.
