Market Focus

On Wednesday, January 17, 2013, attention should be paid to the decision of the Bank of Canada on the interest rate. The decision on which interest rates to set depends mainly on the outlook for growth and inflation. Canada is an exporter country and it is more promising for it to reduce the interest rate to protect exporters. The policy of the Bank of Canada is aimed at keeping the inflation rate within 1-3%.

According to the forecast, the Bank of Canada will raise the discount rate to 1.25%, which will support the Canadian currency, so one should expect the pair USD/CAD to fall by 60-70 points. In turn, market participants will focus on the accompanying statement of the Bank of Canada. Based on this publication the Canadian dollar may show an additional increase in volatility.

Alexander Sivtsov