Investors now await Bank of Canada's policy meeting later today, widely expected to maintain interest rates unchanged.
According to analysis, investors are now focusing on the tone used by BOC in its policy statement, which will have bearing on the Canadian dollar today.
The Royal Bank of Canada bank expects the BOC to take a bullish stance today, in turn providing support to the loonie.
RBC economists say that even as the BOC fell into a neutral stage at the December meeting, it won't turn into monetary easing at the January meeting.
And in fact, if we took recent wages and inflation data into considerations, the BOC is expected to remain bullish on outlook.
Analysts expect the BOC to cite high inflation as basis for holding interest rates tight for an extended duration.
The only thing that could change monetary outlook would be a change in inflation outlook to less than 2%, or a drop in GDP growth in the fourth quarter of last year to 0%.
Loonie benefitted from such developments, becoming the fourth best performing currency in 2024 among G8 currencies.
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
