For this latest Bank of Canada interest rate decision, it seems to be a bearish one, but I won’t mark it as bearish with maximum intensity because there are a few reasons for that. In fact, some mixed reasons.
On one hand, we see oil prices going down, which is technically bearish as per the correlation between the Canadian dollar and Oil.
On the other hand, the two other antipodean central banks, the RBNZ and RBA, are shifting away from their easing or accommodative stance to a restrictive stance. Usually, these three antipodeans—RBA, RBNZ, and BoCatend to move in the same direction.
Right now, oil prices and the lower growth forecast may push the Canadian dollar to the downside. On the other hand, the antipodean shift into a restrictive stance may be a bullish catalyst for the Canadian dollar, especially with the robust employment figures out recently. Mixed scenario.No major changes in interest rate markets yet.
The last key point is the FOMC release. Let’s see how it works.
