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Dovish Bank of Canada Restrains The Canadian Dollar, Says ING

BY MT Newswires | ECONOMIC | 11:16 AM EDT

11:16 AM EDT, 04/29/2026 (MT Newswires) -- The Bank of Canada held rates steady at 2.25% on Wednesday, as expected, said ING.

USD/CAD briefly traded on the strong side after Wednesday's BoC announcement, although market pricing did not shift meaningfully, noted the bank.

Expectations remain for a 25bps rate hike at the October meeting, so more hawkish than ING's baseline call.

Wednesday's relatively dovish BoC endorses the bank's end Q2 call for 1.37 in USD/CAD. ING sees some downside risks to that forecast, given resilience in equity markets and oil prices remaining more elevated than longer.

However, for now, the bank is assuming there will be a period of elevated uncertainty around CUSMA trade deal renegotiations in June, leading to upward volatility in the pair.

ING expects better Canadian dollar (CAD) performance in H2 2026, when a new CUSMA deal could ultimately be agreed and the Federal Reserve should cut rates.

The bank predicts 1.34 by year-end in USD/CAD, with risks to the downside.

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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