BOC Press conference: Q2 is looking pretty solid The Economy is looking like it is in expansion

The Bank of Canada signaled a cautiously positive view of the Canadian economy, saying Q2 looks "pretty solid" and that activity appears to be in expansion. Policymakers said they will judge whether the recent pickup is sustainable, though they currently believe it likely is. The comments matter for USDCAD because they reinforce a data-dependent but potentially firmer BoC stance. Macklem also noted that if oil prices rise again and feed into inflation, the BoC may need consecutive rate hikes to keep inflation contained. He added that Canadian dollar weakness has not been a major driver of policy decisions, but widening US-Canada yield spreads have contributed to CAD weakness. Overall, the remarks slightly support the Canadian dollar by keeping tightening risks alive, while leaving the central bank flexible and undecided.