The Bank of Canada will publish a rate statement and an update on the interest rate on September 9, at 17:00 MT time.
Instruments to trade: USD/CAD, CAD/JPY, EUR/CAD
After the rate cut to 0.25% in March, we don’t expect any changes this time. Besides that, there are several reasons for following the upcoming meeting of the Bank of Canada. Firstly, we need to see if the BOC representatives find the current Covid-19 response (asset purchases) sufficient in current economic conditions. Secondly, it is interesting to hear any hints on possible changes in the monetary policy framework, which is set to be renewed with the federal government next year. For now, policymakers agree that the 2% inflation target is an appropriate one. And, the last but not least, we will be excited about the comments on the current performance of the Canadian dollar, which is trading at the levels of the beginning of 2020.
- If the BOC highlights positive developments in the Canadian economy, the CAD will strengthen;
- If the BOC comments about the weak economy and remaining risks, the CAD will weaken.