Bank of Canada Interest Rate Decision
Today Canada has scheduled to release Interest Rate Decision at 1500 GMT/2030 IST. Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future. The rate decision is usually priced into the market, so it tends to be overshadowed by the BOC Rate Statement, which is focused on the future. BoC Policy Statement is the primary tool the BOC uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.
Traders expect that BoC may adopt aggressive Monetary Policy as Country is struggling to bring down inflation from a three-decade high and accordingly start rising Interest rates in coming months. There is a 70 pct chance that BoC Gov may hike interest rate in today’s meet only or he will conclude the statement as hiking interest rate will only be economic data driven only.
Let’s see how CAD has reacted during the previous data release:
- The CAD strengthens sharply on Wednesday ahead of BoC’s Policy Rate Decision.
- The Pair made intraday high at 1.2630 and low at 1.2559 mark.
- A day chart and H1 chart with triple EMA suggest bearish trend only.
- A sustained close above 1.2605 requires for the upside rally.
- Alternatively, a consistent close below 1.2550 will check further supports.
Take a look and do trade wisely!