The Canadian dollar tumbled to its weakest since December, with USD/CAD reaching
1.3969 on Tuesday, marking a year-to-date low. Brent crude, a key Canadian
export, slid below $90/barrel, adding downside pressure on the currency. Markets
widely expect the Bank of Canada to hold its policy rate at Wednesday’s
decision, pricing a slower hiking path than other major central banks. JP Morgan
FX strategist Pat Locke flagged a mildly dovish risk from the BoC and said his
team favors short CAD/USD positions. After the April 29 meeting the BoC said
current rates “appear appropriate.” Since that meeting the loonie has fallen
more than 2%, the weakest G10 currency. CFTC data show speculators increased
bearish CAD bets for a third consecutive week.
