CADUSD and the BoC: What's the plan here?
Watching $CADUSD today, that move up to 0.7208 feels pretty unconvincing, especially after yesterday's BoC hold. I mean, they're talking about disinflation continuing, but then they reiterate a readiness to hike if necessary. It's a mixed message if ever there was one.
From where I'm sitting, it's either they are done, and that's already priced in, or they're genuinely contemplating another bump which seems at odds with their own outlook. It's hard to get a clear read on the hawkish/dovish lean, and frankly, it makes conviction on any directional play difficult. I'm keeping it on the watchlist, but without a clearer signal, especially from the jobs data next week, it's just noise for now. Any thoughts on how you're playing the Loonie after this?
The BoC always keeps the door open to hikes, that's standard central bank language. The market isn't buying it though; the data just doesn't support another raise right now. Look at the bond yields for a clearer picture.