BoC is widely expected to deliver another rate hike today. The markets seem to have now reached a consensus expectation of a 75bps increase in overnight rate to 4.00%. That would be the highest level since 2008. The tightening cycle shouldn’t stop there, but BoC may indicate that the pace would slow ahead. Some analysts are expecting another 50bps hike in December, followed by a 25bps hike early next year. But the decisions beyond together will very depend on upcoming economic data.
Here are some previews on BoC:
- BOC, BOJ Rate Decisions This Week
- Bank of Canada Preview: Will the BOC Hike Rates by 75bps?
- Bank of Canada to Hike Rates Again Amid Inflation Fight
- Will the BoC Satisfy Expectations of Another Triple Hike?
USD/CAD’s up trend was capped at 1.3976 earlier this month, on overbought condition. For now, further rise is expected as long as 1.3501 support holds. Up trend from 1.2005 would target 200% projection of 1.2005 to 1.2947 from 1.2401 at 1.4285 on break of 1.3976. Nevertheless, break of 1.3501 support will bring deeper fall to 55 day EMA (now at 1.3430) and below.
