CADJPY drop after BoC hints at pause – what's next?

asked by u/neha_j · 1d · 3 answers

Interesting to see $CADJPY really give back ground today, currently trading around 113.637. The BoC's recent tone, hinting at a potential pause in rate hikes, seems to have caught some off guard after the hawkishness we've seen from them for a while. The move down from its 116.45 high today suggests market participants are pricing in a divergence in monetary policy expectations versus the BoJ, which remains steadfastly dovish. I'm watching to see if this is just a quick correction or if we're establishing a new range, especially with oil's recent choppiness not giving CAD the usual clear direction. Keeping an eye on 112.707 as a potential support level, but if the BoC narrative continues to soften, we could see further unwinding of carry trades. $USDTHB seems relatively stable in comparison, though any broader USD strength or weakness could spill over.

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Top answers

  • u/mller_sara· 1 pts· 1d

    Definitely seeing that CAD weakness. Wonder if the market is overreacting a bit to the BoC pause talk, or if this is a sustained shift.

  • u/ado· 1 pts· 1d

    The BoC's recent comments definitely shifted expectations, but I'm not entirely convinced this is a long-term trend reversal for CADJPY. We've seen these kinds of pullbacks before. What's your outlook on the BoJ's actual capacity to diverge significantly for an extended period?

  • u/jsuwannarat· 1 pts· 1d

    เห็นด้วยครับ ตลาดน่าจะเริ่มซึมซับการเปลี่ยนแปลงนโยบายการเงินของ BoC แล้ว ซึ่งสวนทางกับ BoJ ชัดเจนขึ้นเรื่อยๆ น่าสนใจว่าระยะยาวจะกดดัน CADJPY ได้อีกแค่ไหน

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