BoC Ready For Quiet Meeting

Next week, on Wednesday, the Bank of Canada (BoC) will have its monetary policy meeting. Analysts tend to expect a relatively quiet meeting. They consider the BoC will maintain the view that the outlook is evolving as expected and that inflation is transitory.

BoC meeting would be with limited scope for a meaningful change in tone. The BoC will maintain that the outlook is evolving as expected and that inflation strength is largely transitory.

Change of guidance is not expected, as the statement balances rising uncertainty over COVID-19 and supply chain difficulties against labour market strength.

A quiet BoC meeting shifts CAD drivers to the world at large. In turn, COVID-19 uncertainty, heightened risk aversion, and a relatively poor local growth and mobility backdrop should keep USD/CAD hanging around 1.28 for a bit longer.