Market Focus

On Wednesday, October 25, 2017, attention should be paid to the decision of the Bank of Canada on the interest rate. The decision is what interest rates to set depends mainly on the outlook for growth and inflation. Canada is a country exporter and it is more promising for it to lower 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 keep the discount rate at 1.00%, which can cause mixed reactions in the market, as the main reason for the interest rate retention is the slowing of inflation in Canada. This may postpone further tightening of monetary policy for a longer period .

Market participants will focus on the accompanying statement of the Bank of Canada. In case of any hint of further tightening of monetary policy, the Canadian will get support. That is why one should expect the Canadian to strengthen within 60-70 points, otherwise the Canadian will be under additional pressure and this may lead to reduce the Canadian within 70 points.

Alexander Sivtsov