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CAD Reaction Limited Compared To Sharp FI Sell-Off Post BoC Surprise

CANADA
  • USDCAD hovers between 1.334-1.335 (-0.4%) as moves settle down after the BoC’s hike, fading the latest extension of a relentless sell-off in GoCs/rates.
  • It touched a low of 1.3322 immediately on the decision, shunting through 1.3363 (May 11 low) but stopping short of testing a key near-term support at 1.3315 (May 8 low).
  • Having appeared to have already seen a sizeable trimming of CAD net shorts in weeks ahead of the decision, FX reaction has been more limited with CAD back only mid-pack on the day after second from bottom pre-decision.

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