Mitsubishi UFJ Financial Group analyst Derek Halpenny said in a note that even if the Bank of Canada follows Governor Macklem’s signals and raises rates, the Canadian dollar’s upside is likely limited. Markets assign a 76% probability to a 25bp hike, so a move could still surprise traders, but Halpenny said Macklem’s signalling is unlikely to convince markets of a sustained tightening cycle; pricing implies roughly 100bp of cumulative hikes by next September. He added market participants will st

Mitsubishi UFJ Financial Group analyst Derek Halpenny said in a note that even if the Bank of Canada follows Governor Macklem’s signals and raises rates, the Canadian dollar’s upside is likely limited. Markets assign a 76% probability to a 25bp hike, so a move could still surprise traders, but Halpenny said Macklem’s signalling is unlikely to convince markets of a sustained tightening cycle; pricing implies roughly 100bp of cumulative hikes by next September. He added market participants will stay cautious ahead of the Federal Reserve’s rate decision.