BoC monetary policy decision is a major focus for today. After the adjustment in asset purchases in October, we expect BOC to keep the powder dry. Policymakers will caution about the rising number of coronavirus cases and economic impacts of tighter restrictive measures, while noting positive news about vaccine. The central bank will reiterate that accommodative monetary policies should remain in place as slack capacity will only be fully absorbed by 2023. More in BOC Preview: Keeping Powder Dry While Reiterating Stimulus will Last For Years.
Canadian Dollar has been one of the stronger ones this month, with help from rally in oil prices. Any hawkish twist in today’s BoC statement could prompt further rise in the Loonie. CAD/JPY is pressing an important resistance zone of 81.42/81.91 for the moment after recent rally. Further rise is expected as long as 80.42 support holds. Decisive break of 81.91 will resume whole rebound from 73.80. 61.8% projection of 73.80 to 81.91 from 77.91 at 82.92 will be next near term target.
