Currency Traders Brace for Possible ‘Hawkish Hold’ by Bank of Canada

Foreign-exchange traders who had all but priced in a Bank of Canada rate hike are suddenly paying up to hedge against the risk of a letdown at Wednesday’s policy meeting.

The country’s five biggest lenders all brought forward their rate-hike expectations to January from April this month after the nation’s jobless rate dropped to its lowest in more than 40 years. But the cost to protect against loonie losses has skyrocketed after reports the U.S. would withdraw from the North American Free Trade Agreement gave investors pause and thrust the prospect of a stand-pat BOC into the spotlight.

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