The Bank of Canada decision is this week
The Canadian dollar is stronger today as the USD slumps across the board. That's pushed USD/CAD down 47 pips to 1.2411 on the day.
The big driver this week will be the Bank of Canada decision on Wednesday. The OIS market is pricing an 85% chance of a hike but a Reuters poll shows analysts and economists aren't quite so sure.
Their poll shows 8 of 31 analysts expecting no change. Importantly, many of the people in that poll have an academic bent.
"Although the data recently has pointed to a stronger labor market... there are no indications that inflation is about to take off. More importantly, the downside risks to the economy have amplified," said Jean-Paul Lam, professor of economics at University of Waterloo.
Bank economists, meanwhile, are more hawkish. All 6 of the big Canadian banks expect a hike and some have already moved up mortgage rates.
In Bloomberg's poll, just 3 of 26 economists see no move, with the most notable being Standard Chartered Bank.
