- March 7, 2019
- Posted by: Trading
- Category: Currency Forecast
The Bank of Canada will deliver its and in today’s morning U.S. session. According to futures markets, traders are not expecting any changes to monetary policy and only a 16% chance of a rate hike by the BOC’s July meeting.
As we noted on Friday though, Canada has seen a run of poor economic data of late, so the central bank is more likely to drop its previous hawkish bias in favor of a neutral outlook, mirroring the Fed’s shift to neutral on the other side of the 49th parallel. Specifically, traders will be looking for the BOC to remove the warning about rising interest rates over time. If seen, this tweak could take above 1.3400 in tomorrow’s trade.
That said, the central bank may opt to wait until it releases its quarterly economic forecasts in the April meeting before making any dramatic changes to its guidance. If the statement is little changed from January, we could see a quick bout of weakness in USD/CAD (strength in CAD), though the big technical breakout at 1.3300 may put a floor under rates unless prices surge.
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