BoC Hawkish Hold Tests Canadian Dollar Support

The Canadian Dollar is testing key support at 1.3800 after the Bank of Canada's (BoC) decision to hold interest rates at 2.25%. The BoC's hawkish stance, warning of increased upside inflation risks, has brought forward market expectations for a rate hike.

According to BBH's Elias Haddad, the markets' aggressive move is unwarranted given core inflation near target and ongoing excess supply in the economy. He views the break below 1.3800 as opening the door to further downside for USD/CAD.