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Old 23-04-2021, 07:17
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KostiaFM KostiaFM is offline
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Default Re: Daily Economic news by ForexMart

April 21. What to expect from the Bank of Canada meeting today?

Today the Bank of Canada has to make a decision on monetary policy, and it will not be easy. On the one hand, the latest macro statistics for the country were very strong: the economy is actively creating jobs, consumer spending is growing, production activity is accelerating, and the housing market is showing buyers willingness to pay even more than sellers are asking for.

Given these factors, the Central Bank of Canada should be confident and willing to wind down its bond buyback program. However, it is not all so simple.

The fact is that the number of Covid cases in the country is growing steadily, and many parts of Canada are re-imposing restrictions, which will be extended until the end of May. The new restrictions will slow economic recovery and prevent the Bank of Canada from winding down stimulus. Accordingly, the contradiction between strong macro statistics and strict quarantine is one of the reasons why it will not be easy for the Bank of Canada to make a decision on the rate.

The current quote for the USD/CAD pair is 1.2600. The US dollar rose sharply yesterday from 1.2470 to 1.2625. If the Bank of Canada maintains its positive outlook and underscores the outlook for economic recovery, the pair could respond with a decline to 1.25. But if the regulator focuses on risks, and the tone of the statement is cautious, the pair may break through the 1.27 level on the wave of short coverage.
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