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The BOC is up this week! What are markets expecting and how might the Loonie react?

I’ve got the deets, as well as other potential movers that you’ll want to know about if you’re trading the Loonie this week.

Check it out!

BOC’s statement (Dec 9, 3:00 pm GMT)

  • As expected, the Bank of Canada (BOC) kept its interest rates unchanged in November
  • The central bank also shifted its QE purchases to favor longer-term bonds
  • BOC also revised its growth estimates through 2022
  • CAD weakened during the session but mostly due to U.S. election uncertainty and rising COVID-19 cases that dragged commodity prices at the time
  • Analysts don’t expect changes from the central bank this week

Overall demand for CAD

  • Last Friday’s strong jobs data, OPEC+’s supply agreement, and the BOC probably not doing much would make the Loonie an easy pick in case of risk appetite
  • Positive updates on issues like vaccine approvals, Brexit negotiations, U.S. stimulus, and the number of coronavirus cases would accelerate CAD’s gains against its lower-yielding counterparts
  • Closely watched economic releases like China’s trade data, European Central Bank (ECB)’s policy decision, and U.S.’ CPI and PPI report can cause intraday volatility for CAD

Technical snapshot

  • Bollinger Bands are flagging CAD’s “overbought” levels against GBP and USD on the daily time frame
  • CAD remains in Bollinger Bands’ neutral levels against CHF and EUR
CAD Forex Pairs Bollinger Bands from MarketMilk
CAD Forex Pairs Bollinger Bands from MarketMilk
  • EMAs reflect the broad short-term appetite for the Loonie
  • CAD is on short and long-term uptrends against JPY, GBP, and USD
  • Watch out for retracement or reversal opportunities on NZD/CAD
CAD Forex Pairs EMAs from MarketMilk
CAD Forex Pairs EMAs from MarketMilk
  • The Loonie was most volatile against the European currencies in the last week
CAD Forex Pairs Volatility from MarketMilk
CAD Forex Pairs Volatility from MarketMilk

Missed last week’s price action? Read CAD’s price recap for Nov. 30 – Dec 4!