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SocGen Sees BoC On Hold With Rates, For Now; Says CAD May Come Under Pressure Ahead of USMCA Review

BY MT Newswires | ECONOMIC | 09:24 AM EDT

09:24 AM EDT, 04/29/2026 (MT Newswires) -- The Bank of Canada is set to leave the policy rate unchanged at 2.25% for the fourth straight meeting on Wednesday, at 9:45 a.m. ET, says Societe Generale.

The rise in inflation expectations by businesses and households was evident in the latest BoC business survey (BOS), it noted. That could tempt the central bank to raise rates from the current 2.25% closer to the mid-point of the neutral range (2.75%) later this year, and with that reduce the negative spread versus Fed funds, barring a deterioration in the economy and escalation of tariff hostilities with the United States, it said.

The Canadian dollar (CAD or loonie) has recovered around 2% against the US dollar (USD) in April, but the upcoming review of USMCA could cause investors to take profits into May, SocGen said.

Support levels are situated at 1.3600/1.3570, while resistance rests at 1.3733 and 1.3815, according to the bank.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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