The Bank of Canada will be scrutinizing every data point ahead of next Wednesday's interest rate decision. The market is pricing in a 60% chance of a cut, though economists think it's more likely than that.
One data point that could give the BOC caution is today's data from the Canadian Federation of Independent Business, which showed a jump in business optimism to near a two year high. The index rose 8.8 points to 56.4.
“Small businesses are overall feeling cautiously positive heading into the summer.," the survey said, noting that it had rebounded from 'abysmal' levels earlier this year. "Their increased optimism could also be partly explained by much-anticipated interest rate cuts in June and the cooling labour market."
Lower inflation pressures could also be helping.
USD/CAD is down 42 pips today to 1.3621.
