Will the BOC keep rates at 5.00%? All eyes on the Canadian dollar following the policy announcement

Will the BOC keep rates at 5.00%? All eyes on the Canadian dollar following the policy announcement

24.01.2024

In yesterday’s U.S. currency trading, the Canadian dollar rebounded against the yen ahead of today’s Bank of Canada (BOC) policy rate announcement. The CAD/JPY pair rose by approximately 1 yen, from 109.228 to 110.230. It climbed from a level below the 20-period moving average on the 4-hour chart. However, during today’s Asian trading session, the CAD/JPY pair has since fallen back to 109.787.While the BOC is expected to keep its policy rate unchanged at 5.00% in this announcement, it will be interesting to see if the market absorbs the news without any surprises and whether prices hold steady.

European currencies saw the pound fall against the yen despite yesterday’s release of the UK’s December public sector net borrowing, which fell to £6.8 billion from £13.4 billion the previous month. GBP/JPY fell from 188.919 to 187.339.It fell below the 75-period moving average (MA) on the hourly chart. On the 4-hour chart, prices have fallen below the 20-period MA, and as both the highs and lows are being cut lower, traders should pay close attention to price movements during European trading hours.

Today’s economic indicators include Japan’s trade balance at 8:50, Australia’s leading index at 9:00, Sweden’s Money Market CPIF at 16:00, South Africa’s consumer price index at 17:00, the Philippines’ unemployment rate at 18:00, and the UK’sCBI Manufacturing Optimism Index, India’s CPI and Mexico’s CPI at 9:00 PM, the U.S. MBA Mortgage Applications Index at 9:00 PM, the Bank of Canada’s (BOC) policy rate and statement at 12:00 AM, remarks by BOC Governor Macklem at 12:30 AM, and U.S. weekly crude oil inventories.We will be watching the market reaction following the release of these indicators to see if the BOC keeps rates at 5.00% as widely expected.