BoC monetary policy decision – Overview
The Bank of Canada (BoC) is scheduled to announce its latest monetary policy decision at 1500 GMT this Wednesday. The central bank is widely expected to maintain status-quo and leave benchmark policy rates unchanged at 1.75% at its November meeting.
As analysts at TD Securities note: “The communique should be fairly short, and while the Bank will note that weaker commodity prices present a headwind to the outlook, we expect that they will again warn that higher interest rates will be needed.”
How could it affect USD/CAD?
Ahead of the key event risk, the pair was seen oscillating in a narrow trading band below the 1.3300 handle. A hawkish pause might turn the pair vulnerable to resume with its recent corrective slide from five-month tops and head towards retesting the 1.3200 round figure mark.
Alternatively, any dovish signals might exert some downward pressure on the Canadian Dollar and assist the pair to amid back towards challenging multi-month tops, around the 1.3350-60 supply zone.
Key Notes
“¢ The Bank of Canada Preview: No December rate hikes but three more hikes to go in 2019
“¢ BoC Preview: Major Banks expecting BoC to maintain status quo on rates
“¢ USD/CAD consolidates near weekly tops, just below 1.3300 handle ahead of BoC
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 raises 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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