CA BOC Interest Rate today is widely expected to be a hike. With the recent rise in market sentiment and the fact crude prices have stabilized are providing some grounds for BOC to go ahead with today’s rate hike.
If we get a stronger than expected hike, such as 50 basis points, we should buy CAD immediately. If BOC decides to surprise the market by keeping rates unchanged, we should sell CAD.
Here’s what analysts expect:
10:00 am (NY Time) CA BOC Interest Rates Forecast 1.25% Previous 1.00%
DEVIATION: 0.25% ( SELL CAD 1.00% | BUY CAD 1.50%)
The Trade Plan
Most analysts agree that the BOC will hike rates to 1.25%. I´ll be trading this release with a 0.25% deviation using Spike Trading method. In the event of a surprise over hike/unchanged, it´s almost guaranteed that we´ll see strong market movement immediately after the release… However, in all reality, BOC is unlikely to surprise the market today, especially considering recent economic data.
We’ll plan our spike trading only if we get a 1.50% release (SELL USD/CAD), or an unchanged release at 1.00% (BUY USD/CAD). Aside from spike trading, I’d just sit on the sidelines and wait for the Press Conference while going over the BOC Statement…
For more information on my Spike trading method, please read: http://www.currencynewstrading.com/how-to-get-started-with-news-trading/
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: USD/CAD.
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 an 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.