Thoughts on CAD and BoC's recent tone
Watching the $CAD closely, especially after the BoC's surprisingly hawkish tone last week. Despite some recent softness, the currency has remained pretty resilient, holding its ground around 95.879. The market seems to be pricing in a stronger likelihood of another rate hike, or at least a prolonged hold, which could provide a tailwind for the loonie.
This makes me reconsider some of my EM plays, particularly those with significant exposure to US demand or commodities priced in USD. A stronger $CAD could impact export competitiveness for Canadian companies in those sectors. For now, I'm keeping a tighter leash on anything that doesn't have a clear currency hedge or strong domestic demand drivers. Not making any drastic moves, just adjusting my watchlist for potential shifts in the risk/reward.
I'm with you on the BoC. That hawkish pivot was definitely unexpected given some of the data. Curious to see if that resilience in CAD holds up if the US dollar really starts to strengthen again, or if it's mostly due to the rate hike speculation.