Credit Agricole discusses its expectations for tomorrow's BoC policy meeting.
"We believe that FX investors are cautious ahead of the April BoC meeting. Ahead of the meeting, investors expect the MPC to announce the start of its QE taper. In our view, a reduction in the pace of asset purchases could be indeed announced this week but it is likely to be justified by the recent peak of government debt issuance related to the official pandemic relief effort. Moreover, the BoC could push against the recent frontloading of rate hike expectations," CACIB notes.
"Also this week, focus will be on the Canadian CPI data for March. With many positives in the price already, the CAD could be vulnerable to any dovish surprises from the BoC and/or downside surprises from the incoming data," CACIB adds.