USD/CAD is trading firmer above key support at 1.3800 as markets await the Fed’s decision, while the Bank of Canada is widely expected to keep interest rates at 2.25%, with swaps pricing a potential 25 basis point rise over the next year to support the Canadian dollar (CAD), BBH FX analysts reported.
The Bank of Canada expects to keep interest rates steady at 2.25%
“USD/CAD is firmer above key support at 1.3800. Today’s Fed outcome will determine whether USD/CAD will break above this support. The Bank of Canada (BOC) is widely expected to keep interest rates steady at 2.25% (2:45pm in London, 9:45am in New York). The Bank of Canada is likely to reiterate that it “sees the current interest rate at about the right level to keep inflation near 2%.”
“This meeting will not be accompanied by any monetary policy report or press conference. The swap market implies a full interest rate increase of 25 basis points to 2.50% over the next 12 months, which bodes well for the Canadian dollar.”
