Canadian dollar falls to the lowest since March ahead of Macklem speech

<p>Yesterday the Bank of Canada left rates unchanged at 5.00% but the market isn't sure they're done. The October meeting is priced at a 13% chance of a hike and that rises to about 30% for the Dec 6 meeting.</p><p>The BOC <a href="https://www.forexlive.com/centralbank/bank-of-canada-holds-rates-at-500-as-expected-20230906/" target="_blank" rel="follow">statement </a>maintained a hawkish bias, saying:</p><blockquote>The Governing Council remains concerned about the
persistence of underlying inflationary pressures, and is prepared to
increase the policy interest rate further if needed</blockquote><p>Today's speech is an 'economic progress report' which are the speeches delivered by BOC members the day after decisions that don't include a press conference. The aim is to clarify any misinterpreted signals from the statement.</p><p>The BOC is clearly in a wait-and-see mode right now and there are strong signs of a slowdown. So strong, in fact, that the Canadian dollar is at the lowest since March despite a nine-day rally in crude oil. With oil looking like that streak will break today (currently down 60-cents) the pressure on the loonie is even stronger. If anything though, I expect Macklem to 'talk tough' on inflation, which could force USD/CAD lower, at least temporarily.</p><p>In the bigger picture, I've been <a href="https://www.forexlive.com/news/the-canadian-economy-has-hit-the-economic-wall-expect-canadian-dollar-weakness-to-follow-20230814/" target="_blank" rel="follow">calling </a>for Canadian dollar weakness for awhile.</p>

This article was written by Adam Button at www.forexlive.com.