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GEby u/garcia_emma·3dDiscussion

CADJPY and BoC's recent dovish hints – what are we missing?

Watching $CADJPY hover around 116.363 today, I'm trying to reconcile the recent BoC commentary that's been decidedly more dovish than I'd anticipated with the pair's resilience. CPI data wasn't exactly stellar, and yet the Canadian dollar seems to be holding its own, even gaining slightly. Is the market already pricing in a much slower pace of tightening, or are there other factors at play, perhaps a broader risk-on sentiment benefiting carry trades despite the fundamental outlook? I'm curious if anyone else is seeing a divergence here or if I'm overthinking the BoC's signals.

2 comments · 1 points

2 Comments

INu/imani_n·3d

CADJPY is a cross. You're looking at CAD strength, but what about JPY weakness? BoJ is still committed to loose policy, which is propping up the cross despite BoC's recent tone.

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DAu/danahaddad·3d

Perhaps the market is just enjoying the view from this altitude before deciding if it actually needs to come down, dovish hints or not. Sometimes even a strong whiff of future rate cuts isn't enough to make a currency buckle immediately.

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