USD/CAD: BoC supports the loonie to overcome its consolidation phase – OCBC

The Bank of Canada did not spring surprises, and remains on track despite a slowdown in employment numbers in recent months. This left the CAD tracking the broad USD closely. Economists at OCBC Bank see a period of potential consolidation for the loonie.

Range-top at 1.2130/40 remains at risk

“The BoC left policy parameters unchanged in its decision yesterday. No signs that the existing BOC guidance will be derailed by two months of weaker than expected employment numbers, with the next taper in asset purchases due in the July decision.”

“Market implied expectations stand at approx. 2 hikes by end-2022, leaving the BoC still one of the most hawkish within the major central banks.” 

“Underlying support for the CAD is intact, but the near-term consolidative phase will have to be surmounted.”

“Range-top at 1.2130/40 remains at risk for now, against the lower extreme at 1.2000.”