Will the Bank of Canada increase interest rates back to 0.75% since May 2015?
Comments arising from the BoC brings up the issue of a lag between when the economy is running at full pelt AND when inflation starts to increase.
Therefore, the BoC could be looking to increase rates, to provide the space for adjustments in the future (ie. increase, so that they have the ability to decrease)
However, an increase of interest rates would strengthen the CAD against the USD, continuing the downward trend, bringing prices lower.
Therefore, if price were to break support 1.28, we could see a major decline towards 1.25.
Always remember, not just to focus on the rate decision but to pay attention to the statement too.
Comments arising from the BoC brings up the issue of a lag between when the economy is running at full pelt AND when inflation starts to increase.
Therefore, the BoC could be looking to increase rates, to provide the space for adjustments in the future (ie. increase, so that they have the ability to decrease)
However, an increase of interest rates would strengthen the CAD against the USD, continuing the downward trend, bringing prices lower.
Therefore, if price were to break support 1.28, we could see a major decline towards 1.25.
Always remember, not just to focus on the rate decision but to pay attention to the statement too.
Trade closed manually:
Closed for profit
Trade closed: target reached