CAD: Consolidating its outsized gains - BBH

Analysts at BBH explain that the Canadian dollar is consolidating its outsized gains scored yesterday in response to the 25 bp rate hike.  

Key Quotes

“There was not the "buy the rumor sell the fact" activity we thought likely.  Instead, many read the short statement that accompanied the hike to signal a low bar for another hike.  A move at the October 25 meeting would seem particularly aggressive.  It would be the third hike in as many meetings.  Rather, barring a marked change in conditions, further accommodation, which was said to be considerable before yesterday's hike, would likely be removed in December (BOC’s last meeting of the year is December 6).”

“The Bank of Canada attributed the strength of the Canadian dollar to favorable developments in Canada and negative developments for the US.  The Canadian dollar is the strongest currency in the world over the past three months.  It has risen 10.7% against the US dollar.  The Scandies are next (NOK +9.3% and SEK +9.0%), followed by the Chilean peso (+8.2%).”