Canadian Dollar Steady Ahead of BoC Hawkish Tilt
The Canadian dollar has been steady near 1.39 as markets await the Federal Reserve's and Bank of Canada's summary of deliberations on their September 2nd policy decisions.
The BoC is likely to sound more hawkish after firmer inflation data, which suggests underlying pressure on prices despite main releases meeting expectations.
According to Scotiabank strategists Shaun Osborne and Eric Theoret, the Bank's focus on inflation risks relative to growth uncertainty may have sharpened following this week's inflation data.
The BoC's policy settings remain accommodative, but concern about price pressures suggests a growing risk that normalization may start late this year, per Scotia's long-held rate forecast.
The USD/CAD is pressing resistance and is seen to potentially break above 1.3950, opening the way toward the 1.40-1.4150 area if sustained.