BOC's Paul Beaudry adds:

  • Bank of Canada will probably have to raise rates to top of the neutral range or above it
  • We are not going to raise rates automatically; says potentially we could move more quickly
  • There is risk of galloping inflation in Canada if the bank doesn't act correctly

The last comment opens the door for hikes greater than 50 basis points. The BOC has raise rates to 1.5%, but it remains below the neutral rate.

The USDCAD has moved down to test a lower trendline on the hourly chart at session lows. Move below would increase the bearish bias.

USDCAD
USDCAD tests a lower trendline on the hourly chart