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USD/CAD binary signal - BoC Interest Rate Decision - 30 May 2018

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Expiry Time: 
21:00 GMT
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The Bank of Canada will be meeting today for its monthly monetary policy meeting. According to the OIS markets, the expectations are that the Bank of Canada will leave the benchmark overnight rate unchanged at 1.25%. This would mark a third consecutive month where interest rates were left unchanged. The central bank had hiked interest rates three times since last year bringing the overnight rate to 1.25%.

The BoC is expected to maintain a cautious tone amid mixed economic signals. Still, overall the data points to a stronger case for a rate hike later in the year. The latest economic data coming out from Canada showed that the monthly number of jobs had declined in April.

Still, the unemployment rate was unchanged. On the other hand, consumer prices continue to hover just above the BoC's 2% inflation target rate. Both the data points suggest that the Bank of Canada is under no pressure to hike interest rates. It is quite likely that the next rate hike from the BoC could come in the third quarter of this year or as early as June.

A number of factors are expected to keep the BoC policymakers in check. This largely comes from the continued uncertainty in the NAFTA deal alongside global political concerns. The recent uptick in oil prices helped to keep the Canadian dollar stronger however, there was a pullback in oil prices which also pushed the CAD a bit lower.

Overall, today's BoC decision could be unchanged from the previous month's meeting, although the central bank could be seen heading closer to another rate hike.

Today's binary trading signal is USDCAD, the currency pair has been posting gains for nearly seven consecutive days but the upside momentum looks to be easing. We would consider daily PUT options at 1.3020 for a 21:00 GMT expiry time. A close below this level is expected to see the USDCAD close lower on the day.

binary trading signal usdcad 30 may 2018

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion. All risks and coasts associated with online trading are your responsibility.