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There are a couple of events on the economic calendar tomorrow to move the Canadian dollar.
While Canada has, so far, been sidelined by global uncertainty, it doesn’t mean that they will always be. We need to be wary of any signs of a change in economic patterns.
This is especially true for such a seasonal country that is entering winter when economic output generally slows.
Canada is an interesting case study. With the BOC largely staying out of this year’s race to the bottom in rates, the market tends to react to economic data directly.
Without the filter of what the central bank might do, we get a more organic reaction to the data.
Nothing Lasts Forever
There is mounting speculation that the BOC will have to take action if only to keep policy from being distorted by external factors.
With this in mind, the yield curve has continued deeper into inversion over the last month. The market appears to be pricing in at least two rate cuts over the next 12 months.
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