The Bank of Canada is expected to make a policy announcement today. However, with expectations that the central bank will stay the course, the loonie is trading mixed and somewhat rangebound today.
Analysts and Forex traders expect the Bank of Canada to keep the interest rate unchanged at 0.5 per cent today. There isn’t much to point to a rate hike anytime soon. In fact, speculation is beginning that the BoC might decide to ease monetary policy in 2016.
Concerns about the Canadian economy are starting to build, with recent retail sales data disappointing expectations, and with oil prices continuing to remain low. Saudi Arabia may have an OPEC revolt on its hands if it tries to keep production levels the same, and oil prices continue to fall.
For now, the loonie is gaining against its European counterparts as risk aversion sets in today. Against the greenback, the loonie is still struggling as policy divergence is likely to continue. With the Fed set to hike rates, the dovish position of the BoC is likely to keep the Canadian dollar down.
At 15:34 GMT USD/CAD is up to 1.3402 from the open at 1.3365. EUR/CAD is down to 1.4196 from the open at 1.4210. GBP/CAD is down to 2.0104 from the open at 2.0155.
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