Bank of America Global Research discusses its expectations and trading bias for USD/CAD around tomorrow's BoC policy meeting. BofA is looking to buy dips in USD/CAD around 1.30.
"We expect the Bank of Canada (BoC) to keep the overnight rate target at 0.25% on 9 September. We suspect the tone of the September statement could read a touch hawkish, potentially leading to a retest of USD/CAD levels below 1.30 in the absence of higher risk aversion, which remains a key driver of the exchange rate alongside the broader USD,' BofA notes.
"Given the strength of the downtrend since March, we would not necessarily step in long in advance of this meeting, but would rather buy on any weakness thereafter," BofA adds.