The Bank of Canada is scheduled to deliberate on its main interest rate this week and release its decision and monetary policy report this Wednesday at 2 pm, with a press conference scheduled for an hour later.
The forecasts show that the most likely course of action that the BOC can take is to keep the rate at the current level of 1.75%. The Loonie is most likely to be affected by the following commentary by the chairman of BOC Stephen Poloz, who is expected to weigh in on the prospects for future hikes in the rate. The recent CPI in the country reached 1.9%, which very narrowly missed the target of 2%, and was driven mostly by the increasing oil prices.
Overall, there is no immediate indication that the trend in oil prices might reverse and therefore the BOC might be inclined to consider raising the interest rates soon in order to catch up to the rising inflation rate.
The expected rise in volatility following the release of the report creates exciting trading opportunities. The CAD/CHF currency pair is currently trading near the significant resistance level at 0.75954, and the predictable price spike might challenge its significance or eventually bounce back from it.
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