Analysts at Nomura say the BOC will hike in 2012 and that if data continues to point to economic momentum, there could be a hike as soon as the June 5 meeting.
Economists at TD note that rates will move up earlier than anticipated but they remain cautious about risks from Europe and growth. They say rates will remain lower than normal “for some time”.
I believe the BOC wants to see the US and Europe on much firmer footing before it considers raising rates.
USD/CAD is now at 0.9877, just 30 pips from its range bottom. It will be difficult to break that range because positive indications on US growth will hurt QE expectations while negative indications will weigh on CAD.
