BoC rate decision is a major focus today. It’s widely expected to keep overnight rate unchanged at 0.25%. The size of the asset purchase program will also be held at CAD 4B per week. Focuses will be on Governor Tiff Macklem’s guidance on the chance of a “micro rate cut” ahead. That is, lowering interest rate to a new effective lower bound, while keeping it positive. Also, BoC will release new economic projections.
Here some some previews:
- BOC Preview – All Eyes on Likelihood of Micro Rate Cut
- Bank of Canada: Opening the Door for a Rate Cut
- Forward Guidance: BoC to Flag Medium-Term Optimism, Near‑Term Concern
Canadian Dollar is outperformed by European majors this week so far. EUR/CAD’s decline halted ahead of 1.5313 support and recovered. Though, the structure suggests that it’s merely a corrective rise, which is in line with our bearish view. We’d expect the recovery to be limited by 1.5534 resistance to bring decline resumption sooner or later. Firm break of 1.5313 will resume whole fall from 1.5978 to 100% projection of 1.5978 to 1.5313 from 1.5783 at 1.5118.
