Is the BOC decision really so clear?

Is the BOC decision really so clear?

2019-11-11 • Updated

On January 17 the Bank of Canada presents the Interest Rate Announcement and Monetary Policy Report. It is an important event for the Canadian currency that will cause depreciation or appreciation of it.


Coming back to the past the Bank raised the rates twice last year in July and September that pushed the Canadian dollar up. That is why the most of the experts suppose that the Bank will raise the interest rate in 25 basis points to 1.25% despite the uncertainty around the North American Free Trade Agreement (the USA is going to leave the NAFTA). Economists also take into account the large increase in jobs and the survey that showed that Canadian companies are optimistic about the future sales. These factors influenced the opinion of these economists and analysts. Some of the economists even predict another rise in the third and fourth quarters that will bring the benchmark to 1.75% by the end of 2018.

No one has doubts that in general, the economic situation has become better in several points. They are retail sales, GDP growth, consumer price index and activity in the labor market.

But there is another opinion about the rise of the interest rate this time. Some analysts claim that the Bank of Canada can refuse to raise the interest rate because of the doubts about the NAFTA negotiations.

How to trade on this event

Economists consider several scenarios that can happen to the decision of the Bank of Canada. The first one is when the Bank raises the interest rate in 25 points but declines the importance of this decision.

The second one is when the Bank increases the interest rate in 25 points and gives a reason to suppose that it will tighten the policy soon.

And the third one is when the Bank will not lift the interest rate but makes it clear that it is going to do it in March.

All these scenarios can affect the USD/CAD pair in different ways. The first scenario is neutral for the CAD. The second one is bullish for loonie. Finally, in the third case the Canadian dollar will plunge in the short term.

Making a conclusion, we can say that there is no accurate prediction about the decision of the Bank of Canada. Some analysts think that the best option is to sell USD/CAD before the rate decision and looking for opportunities after. However, the decision of the Bank of Canada will be announced tomorrow at 17.00 MT time and we will see what will happen to the currency.   


How Will China’s Regulation Affect Oil?
How Will China’s Regulation Affect Oil?

China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.

The Oil Market in the Month of June
The Oil Market in the Month of June

Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.

Oil Market Outlook
Oil Market Outlook

Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.

Latest news

Gold is Rising Despite Inflation Returns
Gold is Rising Despite Inflation Returns

Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.

Can the Chinese Economy Recover?
Can the Chinese Economy Recover?

Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.


A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera