FX Action: USD-CAD is settled in the upper 1.21s
FX Action: USD-CAD is settled in the upper 1.21s after leaving a nine-day high at 1.2239 yesterday. Analysts are anticipating that the pair's downtrend, which has been in place since May, will resume at some point. The August Canadian employment report last week was supportive of the BoC's path to normalize monetary policy, with policymakers viewing the economy as having escaped the drag from the downside oil price shock of recent years. After last week's 25 bp hike to 1.00% analysts have lifted our expectation for rate hikes through to mid 2018. Analysts anticipate a 2.00% policy setting by the middle of next year, up from our previous 1.50% projection. A 25 basis point rate hike is anticipated at both of the two announcements remaining this year, in October and December. USD-CAD has support at 1.2115.