CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open Account
✖

Bank of Canada Rate Decision Will They Cut Tomorrow

September 3, 2019 4:03 PM

A few weeks ago, we had been monitoring the Bank of Canada and wondering if it was time for them to jump in the pool with the rest of the major central banks around the world and begin cutting rates, or at the very least, turn dovish.   Major data points for Canada up until this Friday, had been better than expected, as the July Inflation Rate (MoM) was 0.5% vs 0.2% expected and the July Retail Sales (MoM) was 0% vs -0.1% expected.  Even GDP was better on Friday.  However, also on Friday we saw the first dents in the armor, as PPI and Raw Materials came in much worse than expected.  These are considered leading indicators of the economy, as they are the first price component which later gets passed through to the consumer.

The last BOC Policy Interest Rate Decision was on July 10th, where they held rates unchanged at 1.75%.  Expectations are for the BOC to leave rates unchanged once again at 1.75%.  The last time the BOC moved on interest rates was October 2018, in which they HIKED 25bps.   Although the BOC projects GDP growth to be 1.3% in 2019 and about 2.0% in 2020, they have remained cautious amid trade tensions and a global slowdown.  The next full update of the Bank’s economy and outlook will not be until the October 30th meeting, so the bank may be likely to carry on with its “appropriate” language and continue to “monitor the data” until then.

We have been monitoring price action in the USD/CAD and waiting patiently for it to meaningfully break above the resistance zone from the horizontal resistance at 1.3345 and the 61.8% retracement from the high on May 31st to the low on July 19th, which is 1.3357   Today we finally moved higher, pushing to a high of 1.3382. 

Source: Tradingview, FOREX.com

However the US ISM Manufacturing PMI released this morning came out worse than expected, creating a false breakout and the pair moved back below that important zone.  Yesterday and today, USD/CAD was bought in the morning and sold in the afternoon, creating two shooting stars on a daily candlestick chart. 

Source: Tradingview, FOREX.com

If the BOC is more hawkish tomorrow, watch for USD/CAD to remain under the 1.3345/1.3357 resistance zone, and trade back into the range.  If they are more dovish, there is room for the pair to trade up towards 1.3500.


StoneX Financial Ltd (trading as "FOREX.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, FOREX.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date.


This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it. No opinion given in this material constitutes a recommendation by FOREX.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.


The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although FOREX.com is not specifically prevented from dealing before providing this material, FOREX.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. For further details see our full non-independent research disclaimer and quarterly summary.


CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Financial Ltd. StoneX Financial Ltd is a company incorporated in England and Wales with UK Companies House number 05616586 and with its registered office at 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is authorised and regulated by the Financial Conduct Authority in the UK, with FCA Register Number: 446717.

FOREX.com is a trademark of StoneX Financial Ltd. This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy. FOREX.com products and services are not intended for Belgium residents.

© FOREX.COM 2025