USD/CAD breaks lower. The change in the decline in expectations in the US was slightly outweighted by Dovish Hold Bank of Canada (BOC).

USD/CAD slides despite the pigeon slim in the BOC statement

“As was largely expected, Boc left the politics rate to 2.75% after the second time. Boc indicated that” there was a clear consensus to maintain unchanged policy, “adding that” Canadian economy is softer, but not sharply weaker “, and” the pillow inflation may be more harder than “.

“However, Boc left the door open to alleviate:” In balance, members thought that there may be a need to lower the policy rate, if the economy weakens in the face of further American tariffs and uncertainty, and pressure on inflation is included. “

“The next BOC meeting is July 30, along with the release of a quarterly monetary policy report. In the swaps curve there was a minimal reaction after yesterday’s BOC policy decision. The swap market is still about 40% of the probability of lowering by 25 BPS in July and almost 50 PB facilitates in the next 12 months.