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Goldman Sachs discusses CAD outlook around tomorrow’s BoC policy decision.
- “This week’s Bank of Canada meeting is a close call, with consensus split on whether they will take another step down in the hiking pace after more mixed activity news and a slightly softer Business Outlook Survey, but still-firm inflation,” GS notes.
- “This could have important implications for CAD; the market is laser-focused on whether central banks will “pivot” or at least “fall off the pace” of the Fed. So far this year, the Canadian Dollar has been a clear outperformer due to the BoC’s aggressive actions and the loonie’s tight links with the USD. However, as recent AUD depreciation demonstrates, if the BoC gives the impression that it is starting to take a more balanced approach, then CAD would probably see some of that outperformance fade,” GS adds.