USD/CAD: BOC signals more cuts are in the pipeline – BBH

USD/CAD is down under 1.3800 in line with the recovery in risk assets, BBH FX analysts note.

BOC easing in the next 12 months is a headwind for CAD

We don’t expect new material information from the Bank of Canada’s (BOC) Summary of Governing Council deliberations later today (6:30pm London). At the July 24 meeting, the BOC slashed the policy rate 25bps to 4.50% but signaled more cuts are in the pipeline. 

The swaps market is pricing a total of 150bps of BOC easing in the next 12 months which is a headwind for CAD. USD/CAD is down under 1.3800 in line with the recovery in risk assets.