The Canadian Dollar was higher versus its US counterpart after the Bank of Canada suggested that more rate hikes could occur this year. The Deputy Governor of the BOC said that Q1 growth was “pretty impressive,” and broader economic signs could lead the BOC to reconsider its currently loose monetary policy. The high price of the session beat the 2-month peak when the USD/CAD pair hit C$1.3269. Most analysts expected the BOC to begin rate hikes next year, but now markets are pricing in 2017 rate hike with a 52% likelihood.
As reported at 11:01 am (BST) in London, the USD/CAD was trading at C$1.33, down 0.38%; the pair earlier hit a trough of C$1.3257 while the peak was at C$133.24. The GBP/USD was trading at $1.2706, a gain of 0.22%; the session peak was at $1.2716 while the low was at $1.2642.
Meanwhile, the US Dollar was struggling in anticipation of the Fed’s 2-day policy meeting which begins later today and concludes on Wednesday. Markets are still trying to piece together the clues for another rate adjustment from the Fed, given the latest somewhat lackluster data. Some analysts believe the Fed will hint on September as the possible start date for reining in the fed’s balance sheet.