Bank of Canada Rate Decision Looms: Impact on CAD and Global Markets

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3730-1.3920

Euro                 1.4830-1.5030

Sterling            1.7820-1.8040

WTI Oil (opening level) $70.36

The Bank of Canada rate decision on interest rate policy (just before 10 am today) is finally upon us. The media reports are anticipating the BOC cutting another 50 bps. This is probably built into the market psychology now. It's possible that recent exchange rates for the CAD/USD stay in the range of 1.3750 to 1.3850 if we see a 25 bps drop. If the news pushes the market past the 1.3890 resistance level then obviously 1.39 will happen and the CAD will likely stabilize around 1.39's in the short term. Should be a big spike just after the announcement.

Other news will not likely effect the CAD any more or less than anything else. But here are some of the other stories that are out there

·    US Treasury yields continued to march higher, pushing the Japanese yen lower. USDJPY trades above 151 in the Asian morning, its highest levels since July and is testing the 200-day moving average at 151.37.

·    A broadly dovish rhetoric from ECB officials pushed EURUSD back below 1.08 for the first time since early August. The IMF also downgraded Germany’s growth and Trump trade also continues to take a toll on the Eurozone’s economic outlook, signaling potentially more downside for the single currency.

·    Commodity currencies outperformed as oil prices jumped higher. AUDUSD attempting a break above 0.67.