The commentary on the BOC doesn't make sense to me

The Bank of Canada decision today is a tough one. Nothing would surprise me, even a surprise hold.

We just don't have a long track record on this version of the BOC. We don't know how they communicate. They haven't hiked in seven years and the two rate cuts were spurred by a collapse on oil prices; so even though they were a surprise at the time, a surprise was justified.

My best guess is that we will see a hawkish hike today. What puzzles me is that no one is expecting that. There are basically two camps: A small camp who sees no hike but a hawkish statement. The much larger camp sees a hike and a dovish statement.

I can actually see the first scenario happening. Maybe the BOC is poor at communicating and wants to give consumers more of a warning before hiking. It would be amateurish because Poloz should have known the market was already pricing in a 70% chance of a hike when he delivered hawkish comments; but it's possible.

What I don't understand is the thinking about a dovish hike. Why would you rush out communication on a hike and roil the market just so you could do a one-and-done or even a two-and-done. If there's no urgency, what's the rush? Why not wait until today to offer a subtle hawkish signal and then move in September?

What's stuck in my mind is the comment from Finance Minister Morneau that the economy is 'firing on all cylinders'. My guess is that the BOC sees upside risks to growth this year and next. They are now starting to feel behind the curve.

I think there is a risk that they pop the Toronto housing bubble but they don't see all that worried about it. The Financial Stability Report brushed off the consequences even if prices did tumble.

As for USD/CAD, I think the downside is more likely. Specs are still net long this pair and they've been aggressively selling any pops. Way too many commentators see a bounce.

Even if the BOC delivers some kind of dovish hike (and the commentary from economists is going to be biased that way because that's what they expected), then I can see sellers lining up in the 1.30-1.31 range. Even with a very dovish hike -- which would make no sense to me -- I think 1.32 is the ceiling and a good spot to sell, especially with oil back above $46.