BoC Hawkish Tone Expected to Boost Canadian Dollar

The Canadian dollar is expected to remain steady near 1.39 against the US dollar as markets await the Federal Reserve's and Bank of Canada's summary of deliberations.

According to Scotiabank strategists Shaun Osborne and Eric Theoret, the BoC will likely sound more hawkish after firmer inflation data and still-accommodative policy.

The Bank of Canada's focus on inflation risks relative to growth uncertainty caused by trade friction may have sharpened following this week's inflation data.

Technically, USD/CAD is seen pressing resistance, with a break above 1.3950 opening the way toward the 1.40-1.4150 area.