BMO Capital Markets says there's a mix of short- and medium-term foreign exchange players who are positioned roughly short-to-neutral on the Canadian dollar going into today's Bank of Canada policy statement at 10am. It suggests the broader consensus is for a more "dovish" tone in the statement and in the Bank's quarterly monetary policy report, which will be released at the same time. Firm warns, however, that this leaves room for USD/CAD to fall back to the low 1.0700s today if there is roughly no change in the tone at all. It would also leave the greenback vulnerable to further downside if Canadian CPI data for June on Friday is stronger than expected.
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