BOC’s Macklem: It could take some time for higher fuel margins to normalise
USD/CAD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
BNP Paribas | Bullish | 1.35 |
UBS | Bullish | 1.34 |
Société Générale | Bullish | 1.40 |
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Comments from Bank of Canada Governor Tiff Macklem cross the wires: It could take some time for higher fuel margins to normalize; that is a worry That is a worry because that will add persistence to headline inflation Have cut Q4 annualized growth forecast to 0.75% Expect inflati
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The desk interprets Governor Tiff Macklem's recent comments as a significant shift towards a more hawkish stance for the Bank of Canada, particularly in light of rising oil prices potentially driving broader inflation. Per the full note [source], Macklem indicated that sustained high oil prices could necessitate consecutive interest rate hikes, a marked change from the previous easing bias. Current CPI inflation has risen to 2.4%, with projections suggesting a peak of around 3% in April, reinforcing the urgency of the central bank's monitoring of inflationary pressures. This shift aligns with our consensus target of 1.075 for CAD/USD, reflecting a cautious yet vigilant approach to monetary policy amidst global uncertainties.
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