Will the Bank of Canada cut its policy rate by 0.5%? Market participants are keeping a close eye on the Canadian dollar’s movements.

Will the Bank of Canada cut its policy rate by 0.5%? Market participants are keeping a close eye on the Canadian dollar’s movements.

23.10.2024

In yesterday’s U.S. currency trading, the Canadian dollar rose against the yen ahead of today’s BOC policy rate announcement. The CAD/JPY pair rose from 108.781 to 109.385. The rise followed the 20-period moving average (MA) on the hourly chart. On the 4-hour chart, the 10-period MA is acting as support, while on the daily chart, the pair is in the process of breaking above the resistance line formed by the 200-period exponential moving average (EMA).Since a 0.5% rate cut is expected from the BOC today, we should be cautious of price movements immediately following the announcement.

Among European currencies, the euro weakened, following the Japanese yen. The euro fell against the U.S. dollar from 1.0838 to 1.0792. On the hourly chart, the price has moved from above the 20-period moving average (MA) to below it. On the 4-hour chart, the 20-period MA is acting as resistance, causing the price to pull back, and on the daily chart, the price has already broken below the 200-period simple moving average (SMA) support line with a real body candle.On the weekly chart, prices have fallen to levels not seen since late July of this year, so we will be watching to see if a rebound occurs during European trading hours.

Today’s schedule includes the Singapore Consumer Price Index at 2:00 PM, the Turkey Consumer Confidence Index at 4:00 PM, the South Africa Consumer Price Index and Taiwan Industrial Production at 5:00 PM, the U.S. MBA Mortgage Applications Index at 8:00 PM, the Bank of Canada (BOC) policy rate decision and statement at 10:45 PM, and the Eurozoneremarks by ECB President Lagarde and U.S. Existing Home Sales, at 11:30 PM the Canadian BOC Governor Maclean’s press conference and U.S. Weekly Crude Oil Inventories, at 2:00 AM the U.S. 20-Year Treasury Auction, and at 3:00 AM the U.S. Beige Book. We should watch closely for any movement in the Canadian dollar immediately following the BOC’s announcement to see if the policy rate is cut by 0.5%.