Goldman Sachs notes that the "BoC.....>

DOLLAR-CANADA: Goldman Sachs notes that the "BoC hiked rates in line with

expectations on 24n October, but the statement, Monetary Policy Report, and

press conference struck a hawkish tone as they i) removed the reference to a

"gradual approach" from the statement, ii) revised up growth expectations

(mostly on the USMCA deal), and iii) emphasized the need for a flexible approach

to policy i.e., every meeting should be live, while reiterating that policy

remains more stimulative than the economy seems to require. We have long held

the view that rates in Canada should rise to the level of US rates over the next

year as the economies are in similar stages of the cycle. If the rate

differential were to close, our short-term cyclical fair value model suggests

CAD would appreciate by roughly 4.5% vs. USD (all else equal), in line with our

three-month forecast of 1.25. We see additional upside risk to CAD from a

reversal in the widening of the WTI-WCS crude oil spread and the latest spike in

the VIX."