Today is Martin Luther King Day in the U.S. Markets are closed there, however elsewhere, markets are basically either side of being flat with traders waiting to see what the week brings. In terms of the Canadian dollar, analysts are waiting for the Bank of Canada on Wednesday, not will it issue its interest rate announcement, but also its Canada Monetary Policy Report.
The consensus will be for no rate movement as employment has rebounded and inflation readings slightly above target, Since 2009 the Bank of Canada (BoC) has regularly updated its economic view via a quarterly Monetary Policy Report. This presents base-case projections for inflation and growth in the Canadian economy as well as an assessment of the risks. The forecast provides a platform upon which the monetary authority can base its decisions with regards to any changes in official interest rates (and/or unconventional monetary instruments). Traders will be looking for some indications for a rate hike.
Expect the USDCAD to range trade till Wednesday.
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