CAD: Risk-Reward Into Next Week’s BoC Meeting – BNPP

BNP Paribas Research expects the Bank of Canada (BoC) to deliver a 25bp rate hike at next week’s meeting.

"Rates markets are pricing in an 88% chance of a rate hike at the meeting and a nearly 70% chance of further tightening by the end of the year," BNPP argues.

This, according to BNPP, leaves the CAD vulnerable in the event that the recent gains in the CAD lead the central bank to postpone tightening or deliver cautious guidance on further hike

In line with this view, BNPP argues that risk-reward does not seem attractive for staying long CAD into the meeting.

Source: BNP Paribas ResearchOriginal Article