USD/CAD: Break below 1.33 to set up a test of the 2023 lows around 1.3260 – TDS

The BoC resumed tightening with another 25 bps rate hike in June. Economists at TD Securities analyze USD/CAD outlook after the surprising decision.

USD/CAD needs to move lower to reprice the hike

The Bank of Canada surprised markets with a 25 bps rate hike. While the market was pricing in around a 50/50 chance of a hike, USD/CAD needs to move lower to reprice the hike. 

We continue to see a break below 1.33 as a path of least resistance, setting up a test of the 2023 lows around 1.3260.