USD/CAD: Hawkish BoC and higher commidity prices to propel the loonie – Commerzbank USDCAD Commodities Ukraine Banks BOC
, the Bank of Canada is set to embark on a path of hiking rates, providing support to the loonie, economists at Commerzbank report.“One support for the CAD recovery is likely to be the expectation that Canada, as a commodity country, will benefit from significantly higher commodity prices. In this context, Putin's war in Ukraine and the high uncertainty fuel the expectation that the supply shortage, will continue or even worsen – with the consequence of further rising prices.
“Expectations of interest rate hikes are likely to provide further support for the loonie. Inflation rates, which have already shot well above the Bank of Canada's target range, could accelerate further instead of drifting back toward the 2% target value as expected by the BoC from the second half of the year.”Information on these pages contains forward-looking statements that involve risks and uncertainties.
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