The Bank of Canada (BOC) Interest Rates decision today is likely to provide no surprise today as the monetary policy of BOC is usually inline with that of the U.S. and with the U.S. now in a recovery path, I believe BOC will announce no drastic measures.
Here’s What Analysts Expect
- 10:00am (NY Time)
- CA BOC Interest Rates Decision Forecast 1.00%
- Previous 1.00%
- DEVIATION: 0.25% (BUY CAD 1.25% / SELL CAD 0.75%)
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… However, in all reality, BOC is likely going to keep rates unchanged at 1.00% since economic data has not been very positive lately, although I would expect to see BOC maintaining a hawkish tone.
I’d recommend using the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair, USDCAD.
Outlook Score
Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency and a weak Outlook Score is the opposite.
Definition:
BOC Interest Rate Decision is set in a target bandwidth for the overnight rate each month of +/- 0.25% around its target overnight rate. The Bank of Canada does not interfere in the overnight market so long as the overnight rate stays within its target band, but the Bank will use its reserves to lend or borrow in the overnight market to ensure that the overnight rate stays within its announced bandwidth.