CIBC have written that "the Bank of...>

DOLLAR-CANADA: CIBC have written that "the Bank of Canada has taken itself out

of the rate hike game in the near-term, downgrading its growth forecasts in its

January report. While the tone still implies that hikes are coming, the timing

was left ambiguous, owing partly to the negative impact of oil production cuts

on growth in both Q4 2018 and Q1 2019. A rebound in oil production could push

the BoC to hike early in Q3. Since markets are not fully priced for that move,

the C$ could be marginally stronger against the US$ in the months ahead, with

our target sitting at 1.30 for dollar-Canada. There is also a statistical link

between WTI oil prices and the Canadian dollar's value, tied to both the role of

oil in Canada's trade balance, and its role as a driver of growth and therefore

monetary policy. That won't mark the start of a run in favour of the loonie,

which we see closing out 2019 back at 1.34 even as other majors climb against

the greenback. Lacklustre growth will prevent the BoC from following through

with additional rate hikes over the final quarter of 2019 or in 2020."