The most impactful releases of this week will fill the market with volatility and sharp movements. Be ready to take action!
What’s new with CAD?
What will happen?
The Bank of Canada will reveal the overnight rate and make a statement on March 2, at 17:00 MT time. This release is important for the CAD movement and all pairs that include this currency. The rate decision is usually priced in by the market. In simple words, traders are aware of forecasted changes, and that's reflected in the current price. But they never know what will be in the BOC statement, so it may have a bigger impact on the market. The Bank of Canada reviews the overnight rate eight times a year.
How will CAD react?
Since March 2020, when the COVID-19 pandemic stroke, the overnight rate has been steady at 0.25% and hasn’t done any surprising movements, as experts expected. However, the inflation rate in Canada is 5.1%, it’s the highest level since 1991. Nevertheless, there are still plenty of struggles in supply chains. The prices for energy are high as well. Because of high inflation, the interest rate can go up this time.
On January 26, 2022, the release wasn’t advantageous for CAD. After the release, CAD fell against USD by approximately 1200 points. It seems the currency needs stronger actions.
How to trade on the Canadian Overnight Rate Release?
If the actual rate is higher than forecasted, it's better for the currency.
Short-term interest rates are essential while valuing a currency. Thus, traders analyze other indicators just in order to predict rates’ further movements.
Check Economic Calendar.
Instruments to trade: USD/CAD, EUR/CAD, CAD/JPY
We prepared an outlook of major events of this week. Check it and be ready!
Here you'll find what awaits the market this week, from the CPI release to a possible gold plunge.
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