Bank of Canada’s Interest Rate Decision
Today Bank of Canada will release Monetary Policy Statement and IVEY PMI data at 1400 GMT/1930 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. Monetary 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.
Today the BoC is widely expected to leave the policy unchanged. Recently, Canada released GDP data with the negative numbers and this is the reason there is little need to hurry for additional tapering. Important to note here that Canada’s Federal Election is scheduled on Sept 20, 2021. This is another reason that the BoC will remain neutral in today’s policy meet.
Let’s see how CAD has reacted during the previous data release:
- The Canadian dollar trades noticeably lower and touches 1.2706 mark in European hours.
- The pair made intraday high at 1.2706 and low at 1.2626 marks.
- Today a day chart and H1 chart with triple EMA suggests bullish trend for the time being.
- A sustained close above 1.2683 on H1 chart requires for the upside rally.
- Alternatively, a consistent close below 1.2626 on H1 chart will check key supports too.
Take a look and do trade wisely!