BoC is widely expected to continue with tightening today. But opinion on the size of the rate hike is split, with odds slightly in favor to 50 than 25. The main question, though, is not about how much the hike is, but how BoC would indicate the path forward. That is, how close interest is to the terminal rate. This is what the statement would be scrutinized for.
Some suggested readings on BoC:
- BOC Interest Rate Decision: Foreshadowing the Fed?
- Can the BoC Meeting Deliver Any Surprises?
- Bank of Canada Hiking Cycle Could Be Drawing to a Close
CAD/JPY’s decline halted last week after hitting 99.46, but it’s just struggling around 100 handle, with no momentum for a solid rebound. For now, deeper fall is expected as long as 4 hour 55 EMA (now at 101.88) holds. Break of 99.46 will resume the decline from 110.87 as a long term correction. CAD/JPY should have a take on 38.2% retracement of 73.80 to 110.87 at 96.70 before forming a bottom.
