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Mar 01 - 02:55 PM

ING: Expecting Limited Impact from March BoC Meeting on USD/CAD

By eFXdata  —  Mar 01 - 01:30 PM


ING predicts the upcoming March Bank of Canada (BoC) meeting to have a relatively modest influence on the USD/CAD currency pair. Despite recent Canadian economic data outperforming expectations and a faster-than-anticipated decline in inflation, market adjustments for rate cuts in Canada seem more aligned with shifting expectations for the Federal Reserve rather than domestic factors. ING suggests that while there might be a slight dovish shift in the BoC's stance, significant dovish repricing is unlikely in March.

Key Points:

  • Canadian Economic Resilience: Recent data indicates the Canadian economy entered 2024 with stronger momentum, highlighted by better-than-expected fourth-quarter growth figures and a rapid decline in inflation rates.

  • BoC and Fed Rate Expectations: The recent unwinding of rate cut bets in Canada is attributed more to changes in Federal Reserve rate expectations than to Canadian domestic indicators.

  • Potential Dovish Shift at BoC: ING considers the possibility of a more dovish tone from the BoC, potentially opening up to rate cuts, though this may not dramatically alter the trajectory for the Canadian dollar due to its close correlation with Fed pricing.


ING anticipates the March Bank of Canada meeting to have a minimal impact on the USD/CAD currency pair, projecting stability in March followed by a USD-led decline starting in the second quarter. While there's a chance for a slightly more dovish BoC message, the significant influence of Federal Reserve rate expectations on Canadian rate cut bets suggests any domestic dovish repricing may be subdued.

ING Research/Market Commentary


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