[achiever]

Since last week, the market has begun to reconsider the Bank of Canada's commitment to keeping rates exceptionally low through midyear. So far, the reconsideration has extended primarily to seeing a sharp increase of rates around mid-year when the commitment expires. If the Bank of Canada were viewed as seriously reconsidering the mid-year target, the CAD would likely appreciate sharply. That said, given its concern about the exchange rate, the next step of BoC discussion may be to caution against expecting such acute rate hikes at mid-year, Given the moves of the past few days, it would be equivalent to talking down the currency, with similar short-term effects, but a dubious effect beyond the medium term.