This morning at 10, the Bank of Canada (BoC) will announce its key rate decision. What can we expect? What should we be watching for?
Barring a surprise, the BoC is unlikely to announce a change to its monetary policy, but the comments that will follow the decision should be particularly interesting. It is worth remembering that after the most recent decision, Governor Stephen Poloz surprised markets by stressing that the institution had actively discussed a rate cut, which sent the Canadian dollar into a tailspin. Since then, the loonie has regained all of the lost ground.
Our economists are stressing that the BoC should not be alarmed by the state of our economy, except possibly in terms of inflation and the effects of a potential renegotiation of NAFTA. Comments on these topics at the press conference will take on a singular importance, as future monetary policy could be influenced by them.
What position should you take before the decision? Given the recent rise in the CAD, USD buyers may find this an attractive time to fill a portion of their needs.
- Range of the day: 1.3025 – 1.3175
Have a great day!
Julien Duquette