What does the data mean to the market?
Bank of Canada (BOC) governing council members come to a consensus on where to set the rate.
Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.
A higher than expected rate is positive/bullish for the CAD, while a lower than expected rate is negative/bearish for the CAD.
Historic deviations and their outcome
March 4 2020 A surprise cut by 0.75% however with the global pandemic taking hold around the world it was no surprise this only saw a 60 pip move.
See the report history here
I will use forecasts of:
Interest Rate 0.5
Today's trade plan
There are varying predictions today, although the official forecast is to hike rates at 0.50%
Therefore today I will take a sell if the rate remains at 0.25% or a buy if they increase to 0.75%
Hope this helps but please do your own analysis!!
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.