BoC Seen Keeping Rates Steady Amid Worsening Trade Tensions

The Bank of Canada (BoC) is expected to maintain its policy rate at 2.25% for a seventh consecutive meeting, according to Brown Brothers Harriman's (BBH) Elias Haddad. This decision would provide a cushion against the worsening US-Canada trade war, which threatens to derail Canada's Q2 growth pickup.

Haddad believes that current market pricing of 75 bps of BoC hikes over twelve months is too aggressive and anticipates a dovish repricing in the markets. As a result, he expects USD/CAD to move higher towards 1.4000.