CAD keeps the firm note – TD

FX Strategists at TD Securtities gave their views on the prospects for the Canadian Dollar.

Key Quotes

“The BoC is now on a policy normalization path, but Poloz is fueling significant uncertainty over the path of interest rates, leaving our call for an October hike at risk. Real GDP growth remains well above trend. Also supporting the case of an October hike is the pickup in wage growth and trend inflation. Concerns over the sensitivity of the economy to higher interest rates now appears to slow Poloz”.

“Canada's growth momentum is among the G10's best and the BoC has delivered back-to-back hikes. Poloz pivot in a recent speech however suggests that the hurdle to tighten policy in the near-term is higher and chasing additional CAD strength from here may become challenged. At the same time, we do not see a compelling reason to look the other way either, especially with the output gap on its way to closure”.