15 Apr 2015
Another surprise rate cut by the BoC to hit CAD hard – MP
FXStreet (Barcelona) - Dean Popplewell, Director of Currency Analysis at MarketPulse, believes that although the consensus favours no changes in rates by the BoC today, a surprise rate cut might lead USD/CAD to test 1.2667 quickly.
Key Quotes
“Today’s Bank of Canada’s meet should be a straightforward process, but one cannot rely on that with Governor Poloz having already surprised the market this year with his one and done “insurance” cut early on.”
“With the BoC there is always a small possibility of a rate cut, however, the oil market has stabilized over the last little while and the Canadian job numbers last week showed a vast improvement (+28.6k jobs and +6.8% unemployment rate) which both go a long way in giving the Governor some wriggle room.”
“What the market should be most interested in is that the BoC will also publish its quarterly monetary policy report. The forecasts for the Canadian economy will be important to watch as they can give traders some idea of what kind of outlook the central bank is assuming and the possible scenarios for the benchmark rate.”
“The loonie is under pressure ($1.2533) ahead of today’s meet. It’s off its high print yesterday ($1.2445) now that the dollar has found a safe haven bid after the disappointing Chinese numbers overnight.”
“A ‘no’ change decision is the expected consensus, however, a surprise rate cut would hit CAD hard, as per the shock cut on January 21. Any negative surprises and investors can expect the first line of resistance to be quickly tested topside ($1.2667).”
Key Quotes
“Today’s Bank of Canada’s meet should be a straightforward process, but one cannot rely on that with Governor Poloz having already surprised the market this year with his one and done “insurance” cut early on.”
“With the BoC there is always a small possibility of a rate cut, however, the oil market has stabilized over the last little while and the Canadian job numbers last week showed a vast improvement (+28.6k jobs and +6.8% unemployment rate) which both go a long way in giving the Governor some wriggle room.”
“What the market should be most interested in is that the BoC will also publish its quarterly monetary policy report. The forecasts for the Canadian economy will be important to watch as they can give traders some idea of what kind of outlook the central bank is assuming and the possible scenarios for the benchmark rate.”
“The loonie is under pressure ($1.2533) ahead of today’s meet. It’s off its high print yesterday ($1.2445) now that the dollar has found a safe haven bid after the disappointing Chinese numbers overnight.”
“A ‘no’ change decision is the expected consensus, however, a surprise rate cut would hit CAD hard, as per the shock cut on January 21. Any negative surprises and investors can expect the first line of resistance to be quickly tested topside ($1.2667).”