Trading The CA BOC Interest Rates Decision, September 9, 2015
CA BOC Interest Rate will probably not be a surprise, as there are practically less than 1% of chance for BOC to surprise the market, especially considering that the drop in crude prices has provided plenty of wiggle room for the central bank…
Here’s what analysts expect:
10:00am (NY Time) CA BOC Interest Rates Decision Forecast 0.50% Previous 0.50% DEVIATION: 0.25% (BUY CAD 0.75% / SELL CAD 0.25%)
The Trade Plan Most analyst agree that the BOC will hold rates at 0.50%. I’ll be trading this release with a 0.25% deviation using Spike Trading method. In the event of a surprise hike, it’s almost guaranteed that we’ll see strong market movement immediately after the release… However, in all reality, BOC is unlikely to surprise the market today, especially considering recent economic data.
I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: USD/CAD.
Outlook Score Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.
Definition BOC Interest Rate Decision is set in a target bandwidth for the overnight rate each month of +/- 0.25% around its target overnight rate. The Bank of Canada does not interfere in the overnight market so long as the overnight rate stays within its target band, but the Bank will use its reserves to lend or borrow in the overnight market to ensure that the overnight rate stays within its announced bandwidth.