CAD slips back on key US PMI data

The Canadian Dollar has slipped back into its lowest bids in almost three weeks against the US Dollar (USD) as broad-market flows reverse direction and pile back into the Greenback following a bumper reading for the US Purchasing Managers’ Index (PMI) that soundly thumped market expectations.

The Bank of Canada is set to announce its latest rate call on Wednesday, and Loonie traders will be looking for the Canadian central bank to hold their reference rate at 5% while leaving the way open for more potential hikes to come later on. Market participants expect little change in the BoC’s forward guidance as Canadian policymakers grapple with a domestic economy that is seeing flagging growth indicators but still high inflation on the back of soaring energy prices.