- Bank of Canada to leave policy unchanged
- USD/CAD Carves Out Double Bottom
- CAD/JPY Testing Key Support
BoC TO HOLD ON POLICY
The Bank of Canada’s monetary policy decision is due 1500BST and will be closely watched by the Canadian Dollar. The BoC is expected to keep policy unchanged. Interest rates will be held at 0.25%, and LSAPs will be kept at a weekly rate of CAD 5bln. Therefore, the main focus will be on the accompanying statement. The Canadian economic recovery has been better than expected, Even so the BoC are expected to maintain a cautious outlook, with no hints towards taking their foot off the easing pedal.
USD/CAD CARVES OUT DOUBLE BOTTOM
The selloff in equities and declining oil prices have weighed on the Canadian Dollar recently, whist a US Dollar correction has seen USD/CAD carve out a double bottom at 1.30 after the move north of 1.32. Risk sentiment is the key driver for the pair and is likely to remain so despite the BoC’s meeting today. On the upside, the correction in USD/CAD could run into sellers above 1.33, provided the risk environment stabilises. A close above 1.3315 opens the door towards 1.34.