Evolving BoC message drives CAD higher - Scotiabank

Bank of Canada (BoC) Deputy Governor Wilkins added considerably to the central bank’s evolving message on the policy outlook yesterday by suggesting that policy makers will be looking to assess whether the “considerable” monetary policy stimulus in place at present is still required in the weeks ahead explains the research team at Scotiabank. 

Key Quotes

“We have shifted opinions on the USDCAD outlook over the past month, becoming much less constructive on the longer run USD outlook; the shift in BoC messaging makes us more constructive on the CAD outlook.  As such, we continue to think corporate USDCAD buyers should wait to hedge USD payables while USDCAD sellers should consider hedging receivables now. Speculative position takers should look to sell USD rallies.  We think Canadian institutional investors should now consider underweighting the USD relative to benchmarks.”