USD/CAD: rate differential to exert upward pressure, post BoC - Nomura

Analysts at Nomura explained that at today’s BoC meeting interest rates were unchanged and the BoC kept its cautious and pragmatic stance. 

Key Quotes:

"We maintain that rate hikes will be gradual, which should see the USD/CAD rates differential continue to exert upward pressure on USD/CAD."

"However, Canada’s terms of trade have improved markedly. The terms of trade tend to be the dominant driver of CAD. We therefore wait for better levels to re-engage CAD shorts."