The Bank of Canada will publish a rate statement and update on the interest rate on Wednesday, at 17:00 MT time.
Will the BOC act amid an improving outlook?
What will happen?
The Bank of Canada will publish a rate statement and update on the interest rate on Wednesday, at 17:00 MT time. The statement normally contains commentary about the economic conditions and insights into further monetary policy decisions. Until now, the bank has made no major changes to the monetary policy since the end of the lockdown. As the outlook of the Canadian economy is improving, analysts project a shift in the central bank’s tone. If it’s true, the BOC will hike the interest rate earlier than in 2023.
How to trade on the BOC rate statement?
Due to analysts' predictions, traders need to pay particular attention to the changes made in the statement. If analysts’ predictions are correct and the Bank of Canada expresses readiness for a rate hike before 2023, the Canadian dollar may strengthen.
- Remember that a hawkish central bank pushes the CAD up;
- A dovish BOC pulls the CAD down.
Instruments to trade: USD/CAD, EUR/CAD, CAD/JPY
What events to follow and how to trade during the week of July 2-6?
EUR/USD retraced to 1.1870 after breaking out this level. It should be just a natural sell-off ahead of the further rally up.
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