Today’s main event will be the monetary policy announcement from the Bank of Canada. The central bank is expected to increase rates by 0.25% from 4.25% up to 4.5%. This could be the final time the Canadian central bank raises rates in this current cycle.
Like the rest of the world, Canadian inflation numbers have been declining over the last few months, easing pressure on the BoC to be as aggressive with their policy as they have been in the past.
The Canadian dollar will take its cues from the decision as well as the accompanying statement. Next week it will be the turn of the Fed to make a decision on rates. Whilst 0.25% is expected, as with the BoC, it could be one of the last times the Fed hike before they pause to assess the impact of policy on the economy.
Written by Viv Savani. 8:54am, January 25th 2023
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