BoC rate decision is the main focus for today. Markets are expecting a 75bps rate hike to 3.25%. But that’s far from being certain. With current interest rate at 2.50% already in neutral range, there are talks that BoC could opt for a smaller hike of 50bps. Yet, there are also arguments for a larger 100bps hike today, followed by a pause. Some wildcard potential is there.
Some previews on BoC:
- Bank of Canada Preview: Will it be 75bps or 100bps?
- Bank of Canada to Hike Again But Could Be Nearing End of Cycle
- Currency Pair of the Week: EUR/CAD
AUD/CAD is making some progress in breaking through 0.8875 minor support this week. The development suggests that corrective rebound from 0.8733 has completed at 0.9104, and larger down trend is ready to resume. Retest of 0.8733 low should be seen first. Decisive break there will confirm this bearish view and target 61.8% projection of 0.9514 to 0.8733 from 0.9104 at 0.8621. However, break of 0.8949 minor resistance, in reaction to BoC, will mix up the outlook.