BoC is widely expected to raise the Overnight Rate by another 50bps to 1.50% today. Governor Tiff Macklem had recently noted that interest rates may need to go above the neutral range, estimated to be between 2% and 3%. Thus BoC should indicate that more tightening is still on the way. But Macklem would probably wait at least until July’s monetary policy report before talking about how high rates would top.
Some previews on BoC:
- BoC Policy Meeting: Stick to the Guidance for Now
- Forward Guidance: Bank of Canada to Hike Rates Again as Economy Runs Hot
CAD/JPY’s strong rally this week suggests that correction from 102.93 has completed at 97.78 already, after drawing support from 55 day EMA. Further rise is now expected as long as 100.64 minor support holds. Firm break of 102.93 will resume larger up trend and target 61.8% projection of 89.21 to 102.93 from 97.78 at 106.25.