• BoC holds rates at 5%, doesn’t expect 2% inflation in 2024.
• Canada releases labor figures on Friday that will be overshadowed by US NFP.
• Fed Chair Powell doesn’t see recession, Greenback eases on Wednesday.

The Canadian Dollar (CAD) surged half a percent against the US Dollar (USD) on Wednesday after the Bank of Canada (BoC) held rates at 5.0% as markets had broadly expected. Federal Reserve (Fed) Chair Jerome Powell added to downside Greenback pressure, noting that the Fed needs more evidence of inflation reaching 2%, but doesn’t see risk of a US recession on the cards.

Canada’s next key data print will be Friday’s labor figures, but the US Nonfarm Payrolls (NFP) report is likely to engulf market attention to end the trading week. Markets are expecting the Canadian Unemployment Rate to tick slightly higher to 5.8% from 5.7%. February’s US NFP print is expected to ease back to 200K from January’s 11-month high of 353K.