Last 12 hours has seen the CAD fall...>

DOLLAR-CANADA: Last 12 hours has seen the CAD fall afoul of the increase in US

protectionist measures, lower oil prices and the stronger USD.

- Today's BOC decision is front and centre for participants. Amid a backdrop of

strong economic data, the Bank of Canada is widely expected to hike rate by

25bps to 1.5%. Markets will focus on the MPR with updated forecasts for GDP &

inflation. Governor Poloz's press conference will also be key re: forward

guidance. Caution is expected to remain around trade related uncertainties with

US steel & aluminium tariffs, NAFTA talks and the threat of more levies in the

auto sector.

- USD/CAD last deals at C$1.3135, after it registered a high of C$1.3155. The

July 04/05 highs provide initial resistance (C$1.3160/62), with support noted at

the July 10 low (C$1.3101).

- Most domestic banks forecast a 25bp hike, suggesting a dovish hike, while CIBC

moves away from the consensus suggesting a hawkish hike. CIBC see market

positioned short CAD, add that any react dip below C$1.3000 would provide an

attractive level to enter longs, a move toward C$1.2850 would be a 'gift'.