Bank of Canada (BoC) Rate Decision Preview (OCT 2024)

The BoC is expected to boost its efforts in normalizing monetary policy, with the central bank anticipated to reduce the benchmark interest rate by 50bp in September to 3.75% from 4.25%.

Bank of Canada (BoC) Interest Rate Decision

The Bank of Canada (BoC) took further steps to unwind its restrictive policy in September, with the central bank lowering the benchmark interest rate by 25bp to 4.25% from 4.50%.

Canada Economic Calendar – September 4, 2024

After delivering its third straight rate cut, the BoC stated that ‘as expected, inflation slowed further to 2.5% in July,’ with the central bank going onto say that ‘excess supply in the economy continues to put downward pressure on inflation.’

Nevertheless, the BoC acknowledged that ‘price increases in shelter and some other services are holding inflation up,’ and it remains to be seen if Governor Tiff Macklem and Co. will retain its current approach in achieving a neutral stance as the ‘Governing Council is carefully assessing these opposing forces on inflation.’

USD/CAD Chart – 15 Minute

Chart Prepared by David Song, Strategist; USD/CAD on TradingView

The Canadian Dollar showed a bullish reaction the BoC meeting even as the central bank continued to unwind its restrictive policy, with USD/CAD trading lower throughout the day to close at 1.3500. Nevertheless, the weakness in USD/CAD was short-lived as the exchange rate closed the week at 1.3583.

Looking ahead, the BoC is expected to boost its efforts in normalizing monetary policy, with the central bank anticipated to reduce the benchmark interest rate by 50bp in September to 3.75% from 4.25%.

With that said, another BoC rate cut may produce headwinds for the Canadian Dollar as the central bank takes additional steps to support the economy, but a shift in the forward guidance for monetary policy may generate a bullish reaction in Loonie should Governor Macklem and Co. reveal plans to conclude its rate-cutting cycle.

Additional Market Outlooks

US Dollar Forecast: AUD/USD Falls Toward September Low

Gold Price Breakout Pushes RSI into Overbought Zone

US Dollar Forecast: USD/JPY Vulnerable on Failure to Test August High

USD/CAD Rally Eyes August High as RSI Pushes into Overbought Zone

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong

Latest market news

Yen Strength Returns: USD/JPY, EUR/JPY Sell-Offs Gain Steam

Today 07:26 PM

Gold Goes for Recovery After Bitcoin, Trump-Fueled Pullbacks

Today 05:03 PM

AUD/USD Approaches November Low with Australia GDP on Tap

Today 04:15 PM

Forex Seasonality – December 2024: Can EUR/USD and AUD/USD Rally?

Today 04:11 PM

Crude oil forecast: Crucial week as OPEC meeting and key data loom

Today 03:45 PM

Nasdaq 100 Forecast: QQQ rises ahead of a data-heavy week

Today 02:05 PM

Open an account today

Experience award-winning platforms with fast and secure execution.

Open account

Web Trader platform

Our sophisticated web-based platform is packed with features.

Learn more

Latest BOC articles

USD/CAD: Eyes on inflation report as reversal sets stage for further downside

By:

David Scutt

November 19, 2024 04:14 AM

USD/CAD Defends Post-BoC Reaction to Eye August High

By:

David Song

October 24, 2024 04:30 PM

USD/CAD forecast: Investors eye BOC and ISM PMI ahead of NFP

By:

Fawad Razaqzada

June 5, 2024 10:55 AM

S&P 500 rally threatened as geopolitics enters the ring: The Week Ahead

By:

Matt Simpson

April 5, 2024 05:26 AM

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.