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

MNI (London)
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'.
MNI London Bureau | +44 203-586-2231 |
MNI London Bureau | +44 203-586-2231 |

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