FXStreet reports that in the view of economists at HSBC, further CAD gains could be sustainable over the longer term, if terminal rate pricing can be extended.
“The BoC’s decision is likely to provide some near-term support to the CAD, and oil prices will remain part of the equation for the CAD. It is possible for oil prices to extend a rally, while our oil and gas analysts see oil prices dropping next year as US supply returns.”
“If markets see the BoC’s hawkishness as a sign that terminal rate pricing can be extended, this would potentially point to more sustainable gains for the CAD.”