Canadian dollar weakens as inflation data give boost to June rate cut bets

"Swap-implied odds on a Bank of Canada rate cut at the June meeting are rising beyond the 50-percent threshold, sending the Canadian dollar sharply lower against the greenback," Karl Schamotta, chief market strategist at Corpay, said in a note. Investors see a 57% chance that the BoC would begin a rate cutting campaign at its next policy decision on June 5, up from roughly 40% before the inflation data, swaps market data showed. "It is clear that economic downside risks should now outweigh inflation in determining policy settings. The Canadian dollar could remain under selling pressure until the U.S. joins the country in exhibiting signs of a slowdown," Schamotta said. Globe and Mail: Canadian dollar weakens as inflation data give boost to June rate cut bets