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Canadian Dollar Faces Amplifying Downside Pressures as Central Bank Seen on Hold, Says SocGen

BY MT Newswires | ECONOMIC | 07:25 AM EDT

07:25 AM EDT, 06/10/2026 (MT Newswires) -- Societe Generale said it expects the Bank of Canada to keep its policy rate unchanged at 2.25% on Wednesday, the lower end of the neutral range.

The BoC is slated to release its policy statement at 9:45 a.m. ET on Wednesday, followed by a press conference 45 minutes later.

The economy sank into a technical recession following two successive quarters of contraction and core inflation eased to 2.1% year over year in April.

Policymakers have previously signaled a reluctance to overinterpret the recent weakness in the economy, writes the bank in a note to clients. The "impressive" Labour Force Survey (LFS) last week gives Governor Tiff Macklem cover to maintain a neutral policy stance.

Surveys point to no change in rates through 2026, which is a potential source of weakness for the Canadian dollar (CAD or loonie) -- all else being equal, stated SocGen.

The 30-day correlation for the CAD with WTI crude has turned negative, while its relationship with gold has strengthened, amplifying downside pressure, according to SocGen.

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

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