CAD Rebound Faces Resistance from Short-Term Valuation Models

The Bank of Canada's decision to keep interest rates unchanged at 2.25% had an immediate impact on the Canadian dollar, causing it to advance.

However, MUFG analyst Derek Halpenny is skeptical about a sustained rebound in the CAD, citing short-term valuation models that suggest USD/CAD should trade higher.

The Bank of Canada signaled greater concern over inflation and hinted at a possible earlier rate hike, but Halpenny doubts this will lead to a sustained increase in the CAD's value.