Goldman Sachs on the Canadian dollar after the BOC

From Goldman Sachs:

The Bank of Canada sounded a note of caution, indicating that recent weakness in exports "raises the possibility" that growth will be "somewhat lower" than it was forecasting in July. It also indicated that risks to the inflation profile had "tilted somewhat to the downside". This is the first time the BoC has flagged downside inflation risks since the July 2015 meeting, where it cut its policy rate.

We therefore see some scope for further policy action later this year should activity continue to disappoint.

Tactically, we think USD/CAD upside offers a compelling near-term risk-reward.

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