JPY Daily News

Interest Rate Decision for the BoC

The BoC meets on Tuesday to set its overnight rate. Consensus forecasts are for the BoC to keep interest rates on hold at 1.00% despite the recent economic data coming in on the downside of market forecasts. The Q3 GDP report was marginal at best with GDP rising 0.2%. Last Friday gave us weaker than expected employment numbers. However, with the BoC keeping monetary policy as is the CAD may prove to be attractive. Expectations of quantitative easing by the Fed, ECB, and BoE, and an increase in crude oil prices above the $100 level all support the CAD. According to the most recent CFCT IMM data traders have increased their bearish bets against the CAD with a decrease in risk exposure. This could put pressure on CAD shorts should there be a turnaround in market sentiment with a solution to the European debt crisis. The USD/CAD could test the rising trend line from the July and October lows at 1.0090 followed 0.9890 at the October low. The 1.0250 from Tuesday's low is the initial resistance.

Current Time: 05/27 01:23 GMT

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