– Bank of Canada (BoC) to Keep Benchmark Interest Rate at Record-Low of 0.50%.
– Will Governor Poloz Continue to Tame Market Expectations?
Trading the News: Bank of Canada (BoC) Interest Rate Decision
Even though the Bank of Canada (BoC) is widely expected to preserve the current stance in April, the updated monetary policy report may impact the near-term outlook for USD/CAD should the central bank adopt an improved outlook for the region.
What’s Expected:
Why Is This Event Important:
The BoC may continue to endorse a wait-and-see approach for monetary policy as ‘subdued growth in wages and hours worked continue to reflect persistent economic slack in Canada,’ and Governor Stephen Poloz may continue to tame interest-rate expectations as officials pledges to look through the temporary factors fueling headline inflation. However, the central bank may change its tune and show a greater willingness to move away from the record-low interest rate amid the positive developments coming out of the real economy.
Expectations: Bullish Argument/Scenario
Release
Expected
Actual
Housing Starts (MAR)
214.5K
253.7K
Net Change in Employment (MAR)
5.7K
19.4K
Retail Sales (MoM) (JAN)
1.5%
2.2%
The pickup in household consumption accompanied by the ongoing expansion in job growth may encourage the BoC to move away from its accommodative policy stance, and the fresh updates may heighten the appeal of the Canadian dollar should Governor Poloz highlight an improved outlook for growth and inflation.
Risk: Bearish Argument/Scenario
Release
Expected
Actual
Business Outlook Future Sales (1Q)
—
21.00
International Merchandise Trade (FEB)
0.60B
-0.97B
Consumer Price Index (YoY) (FEB)
2.1%
2.0%
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