Bank of Canada is Expected to Keep Interest Rates Steady.
Wednesday 30 October, 2019
Daily Currency UpdateCAD - Canadian DollarThe Bank of Canada will set its key interest rate today at 10 am, and a hold at 1.75 percent is expected. The BOC has maintained interest rates at current levels for almost a year. Therefore market participants will be keen on combing through any hints of a change in policy in the coming months. Solid prints this year from significant fundamentals in Canada like employment data and wage increases have kept Governor Poloz and Deputy Governor Wilkins in check to hold on rates. The Canadian central bank is being somewhat overshadowed by the U.S. Federal Reserve today, as the FOMC is also setting policy four hours after the BOC. This will be the first time since 2000 that the Bank of Canada and the Federal Reserve have set policy interest rates on the same day. The Fed lead by Chairman Jerome Powell is wildly expected to cut rates by a quarter-point today from current 1.75% to 1.50%. The greenback made gains yesterday heading into decision day as participants would instead hold the world’s reserve currency when a change in policy is expected. Equities in North America are holding steady this morning, WTI Crude prices are mixed with U.S. stockpiles expected to fall off from last week’s print. Gold was falling to a one week low but has since reversed course and is posting a 0.37 percent gain up to about $5.50 to $1493 a troy ounce. The technicals for the USD/CAD have immediate support at 1.3057, 1.3029, and psychological support at 1.300. On the other side, resistance is seen at 1.3114, 1.3157, and 1.3200.
Key MoversThe Brexit headlines continued overnight with UK parliament voting overwhelmingly (438-20) to have a general election on December 12th. The bill will need to go to the House of Lords before getting its Royal Assent on Thursday. It's expected that there is to be minimal disruption in the Upper House. Interesting to note that many of the Ministers abstained, signaling reluctance among the vote. GBP/USD was relatively volatile overnight, touching lows of 1.2807 before spiking 0.77 percent to a high of 1.2905 as the Labour Party announced it would back the election. It is now sitting around 1.2865.
- USD/CAD: 1.3029 - 1.3114 ▼
- EUR/CAD: 1.4523 - 1.4565 ▼
- GBP/CAD: 1.6831 - 1.6885 ▲
- AUD/CAD: 0.8965 - 0.8995 ▼
- NZD/CAD: 0.8302 - 0.8335 ▼