CAD traded mixed against other major currencies in the European session on Wednesday as investors waited for the announcement of the Bank of Canada's decision on interest rates later in the day.
Markets widely expect the Canadian central bank will deliver a hefty 50-basis-point interest rate decrease when it announces its latest policy decision at 13:45 GMT. The move would mark the fourth consecutive rate reduction by the BoC, bringing its benchmark rate to 3.75%, down from the current level of 4.25%. However, some economists warn that the BoC might opt for a less aggressive move, noting that though inflation in Canada fell below the central bank’s 2% target and the labour market cooled, the country’s economy continued growing.
Investors will thoroughly scrutinize the BoC’s monetary policy report and the comments from its governor Macklem for clues on the further monetary policy path.
Markets are now pricing in more than 25-basis-point rate cuts for the BoC’s December meeting.