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Trading CA BOC Interest Rate

ByHenry Liu
Published 12/06/2011, 08:05 AM
Updated 07/09/2023, 06:31 AM
USD/CAD
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The Bank of Canada (BOC) will announce their rate decision today at 9:00am sharp.

Here´s what analysts expect:
9:00am (NY Time) CA BOC Rate Decision Forecast 1.00% Previous 1.00%
ACTION: USD/CAD BUY 0.75% SELL 1.25%

The Trade Plan
Most analyst agree that the BOC will hold rates at 1.00%. I´ll be trading this release with a 0.25% deviation using Spike Trading method. In the event of a surprise hike it´s almost guaranteed that we´ll see strong market movement immediately after the release.

The Market
BOC is expected to keep rates unchanged during this meeting and as a matter of fact, it is an unanimous prediction by all analysts. As a matter of fact, most analysts agree that BOC’s next move is likely a rate hike, but considering the current economic climate, with Europe struggling over debt crisis and the U.S. politics getting in the way of a budget, BOC may just remain put until significant improvements have been realized in the global economy.  Consensus currently puts the next BOC move around Q3 of 2012.

Additional Thoughts
It is extremely likely for BOC to keep rates unchanged. Market may react to the accompanied statement, which will be crucial for CAD if BOC signals a rate hike for the next meeting.

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