- Bank of Canada (BoC) to Hold Benchmark Interest Rate at 1.25% in April. Will Governor Stephen Poloz and Co. Stick to the Current Script Amid Above-Target Inflation?
- USD/CAD[1] Slips to Fresh Monthly-Low (1.2527), Bearish RSI Formation Remains Intact Ahead of BoC Meeting.
Trading the News: Bank of Canada (BoC) Interest Rate Decision
More of the same from the Bank of Canada (BoC) may curb the recent decline in USD/CAD as market participants scale back bets for an imminent rate-hike.
The BoC may merely attempt to buy more time as ‘trade policy developments are an important and growing source of uncertainty for the global and Canadian outlooks,’ and the central bank may offer little guidance on the timing of the next rate-hike amid ‘heightened uncertainty about future US trade policies, changes in inflation dynamics, wage behaviour and the impact of interest rates on the economy, given high levels of household debt.’
However,signs of above-target inflation paired with the ongoing improvement in labor market dynamics may push Governor Stephen Poloz and Co. to prepare Canadian households and businesses for higher borrowing-costs as ‘the economic outlook is expected to warrant higher interest rates over time.’ A material shift in the monetary policy outlook may fuel the decline from the April-high (1.2944) as market participants prepare for higher interest rates.
Impact that the BoC rate decision has had on USD/CAD during the previous meeting
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