The markets are awaiting the Bank of Canada’s interest rate statement as well as its quarterly Monetary Policy Report at 10 am this morning. In April, the bank pulled back on its asset quantitative easing efforts moved its timing for a potential rate hike to 2022 from 2023. That made the Canadian central bank the most hawkish of major economies and led to a sustained rally in the Canadian dollar. That rally came to an end when the US Federal Reserve also moved to a more hawkish posture a few weeks ago. This time, no change in the projected timing of rate rises is expected but the markets will be watching closely for details of changes to the Bank’s asset purchase program. Before the Bank of Canada could take the stage however, Fed Chairman Powell impacted markets by stating in a speech that the US central bank is still far off from altering its easy monetary policies. That led to a dip in USD. That dip, along with oil trading again near multi-year highs, has the Canadian dollar up 0.4% before the Bank of Canada statement. At the moment, USD to CAD is at 1.246 (CAD to USD at 0.802).
