Nordea FX Strategy Research expects the BoC to adopt a wait-and-see stance at its October policy meeting on Wednesday.
"Bank of Canada has got the chance to make it three hikes in a row this week. And while the labour market provides BoC a continued scope for policy tightening (Poloz said inflation models are not broken), it will still be a major surprise to see a third consecutive hike.
WIRP gives roughly 20% implied probability of a hike. And as the house price momentum is starting to cool, BoC will likely adopt a wait-and-see stance this week. We are still watching out for the unneglectable risk that Bank of Canada has made a grave policy mistake in firming the policy stance too early.
Bias for higher USD/CAD is intact ahead of New Year," Nordea adds.
Source: Nordea ResearchOriginal Article
