USD/CAD Ignores BOC Business Poll

Monday, 04 April 2011 15:17

A mixed Bank of Canada business outlook survey failed to impact the markets on Monday. Despite concerns over inflation and commodity prices, the USD/CAD preferred to stay within its tight range near 0.9680.

The poll reports revealed a strong business sentiment with a continuation of employment intent and economical growth.

The main concern is inflation, which is seen as pushing higher by the majority of the 100 businesses surveyed. This could be the result of increasing commodity prices and a strong Canadian dollar.

Overall, 74% of businesses expect inflation to hit 2% or higher in the next two years:

These hints of inflationary pressures should prevent the Bank of Canada from increasing its rate next week. Markets don’t expect any hike until July.