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BNY's Geoff Yu reports easing selling pressure on the Canadian Dollar (CAD) ahead of the Bank of Canada (BoC) meeting, allowing modest CAD purchases after sustained bearish momentum. The market has seen prolonged CAD weakness due to higher interest rates and economic slowdown concerns, but recent data suggests a tentative reversal in short-term flows as traders anticipate central bank policy cues. This shift reflects cautious positioning ahead of the BoC's policy decision, which could influence CAD's trajectory. For traders, the BoC's meeting outcome and subsequent statements will be critical in determining CAD's direction. Broader market implications include potential ripple effects on commodity-linked currencies and cross-asset correlations. Investors should monitor BoC's rate decision, inflation forecasts, and any hints on future tightening cycles.
