22 Oct 2013
Flash: A dovish BoC coming up? – RBS
FXstreet.com (London) - Research teams at RBS said, “The Bank of Canada (BoC) monetary policy decision takes place on 23 October”.
Key Quotes:
“The decision will be accompanied by a post-release statement and the latest quarterly Monetary Policy Report”.
“Later, Governor Poloz will hold a press conference to discuss the results of the Monetary Policy Report”.
“We anticipate the forecasts will lean on the dovish side and to further highlight the risks to growth from a slower than anticipate export recovery, though we do not expect a change in the benchmark interest rate or key language on the overnight lending rate”.
“A moderate dovish shift from the Bank of Canada should be a modest negative for the CAD. It now seems unlikely that the FOMC will taper its asset purchases in 2013, a development which should be supportive for CAD”.
“However, a more dovish BoC combined with longer-term concerns should keep CAD gains in check. We still broadly expect USD/CAD to re-establish a 1.03 – 1.06 range to into year-end, but FOMC developments leave us favouring USD/CAD at the lower end, rather than the top end, of that range”.
Key Quotes:
“The decision will be accompanied by a post-release statement and the latest quarterly Monetary Policy Report”.
“Later, Governor Poloz will hold a press conference to discuss the results of the Monetary Policy Report”.
“We anticipate the forecasts will lean on the dovish side and to further highlight the risks to growth from a slower than anticipate export recovery, though we do not expect a change in the benchmark interest rate or key language on the overnight lending rate”.
“A moderate dovish shift from the Bank of Canada should be a modest negative for the CAD. It now seems unlikely that the FOMC will taper its asset purchases in 2013, a development which should be supportive for CAD”.
“However, a more dovish BoC combined with longer-term concerns should keep CAD gains in check. We still broadly expect USD/CAD to re-establish a 1.03 – 1.06 range to into year-end, but FOMC developments leave us favouring USD/CAD at the lower end, rather than the top end, of that range”.