When is the BoC rate decision and how could it affect USD/CAD?
|BoC monetary policy decision - Overview
The Bank of Canada (BoC) is scheduled to announce its latest monetary policy decision at 1400 GMT. The Canadian central bank is widely expected to raise interest by 25bps points and hence, the key focus would be on the post-meeting press conference with Governor Poloz and Senior Deputy Governor Wilkins at 1315 GMT.
Analysts at TD Securities explain: “We look for the Bank to retain an upbeat tone on economic conditions and continue to emphasize a gradual and data dependent approach to rate hikes going forward.”
How could it affect USD/CAD?
Ahead of the key event risk, the USD/CAD pair was seen extending this week's recovery move from three-week lows and was seen trading at over one-week tops, around mid-1.3100s. Should the central bank stick to its hawkish stance, the pair is likely to slide back below the 1.3100 handle and retest 1.3065 support area. The pair could eventually drop towards testing 50-day SMA support near the 1.3020 region.
Alternatively, any dovish signals would weaken the Canadian Dollar and continue lifting the pair towards the 1.3200 handle. A follow-through buying interest has the potential to continue lifting the pair, even beyond 1.3225 supply zone, towards 1.3270 intermediate resistance and the 1.3300 handle.
Key Notes:
• USD/CAD rises to over one-week tops, BoC in focus
• BoC & Canadian Dollar Preview
• BoC: Heading back to neutral - AmpGFX
About the BoC interest rate decision
BoC Interest Rate Decision is announced by the Bank of Canada. If the BoC is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the CAD. Likewise, if the BoC has a dovish view on the Canadian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.
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