CAD: BoC 'Relatively Sanguine' To CAD Strength; A Buy On Dips For Now - BofAML

Bank of America Merrill Lynch FX Strategy Research notes that CAD has been the big mover last week following the surprise decision by the BoC to hike by 25bps for the second time this year.
"Canada rate differential support the case for further CAD upside but our economics team urges some caution and expects the next rate hike in January 2018.
The risks are skewed to sooner rather than later, but much will depend on whether the Canadian economy can absorb the recent appreciation in CAD TWI and continue to grow at its current pace.
For now, the BoC appears to be relatively sanguine on recent CAD trends. We think CAD could be a buy on dips at least for now," BofAML argues.