08:14 AM EDT, 06/04/2025 (MT Newswires) -- Wednesday's Bank of Canada meeting has been a very hard one to call, said ING.

The BoC is slated to release its policy statement at 9:45 a.m. ET.

Consensus was slightly favoring a 25bps cut before aligning with market pricing for a hold over the past couple of days, wrote the bank in a note.

The Canadian dollar (CAD or loonie) OIS curve currently embeds around 25% probability of a cut on Wednesday, which to ING looks too conservative considering the ever-rising downside risks to the Canadian economy, especially after United States President Donald Trump hiked metal tariffs, which damage Canada more than any other country.

The bank thinks Wednesday's policy meeting is a "coin toss." ING is very marginally favoring a cut purely based on the economic justification, but admits that the BoC might send an excessively dovish signal by cutting when markets are pricing in only 5bps.

Anyway, a hold may well be accompanied by dovish language, and the market's pricing for the July meeting (-16bps) and year-end (-38bps) both look too conservative to ING.

The Canadian dollar is one of the bank's least favorite currencies at the moment, also considering the asymmetrical correlation with U.S. economic woes compared with other G10 currencies.