Canadian Dollar To Strengthen Further On BoC Rate Expectations

The Canadian dollar continued to retrace the decline from back in May, and the appreciation in the loonie may accelerate in the following week should the Bank of Canada show an increased willingness to raise the benchmark interest rate off of 1.00%. According to Credit Suisse overnight index swaps, market participants widely expect the central bank to retain its current policy next week, but see borrowing costs increasing by nearly 50bp over the next 12-months as growth and inflation gather pace.