When the Bank of Canada is not a party to a rate-setting decision, Canadian Dollar Treads Higher on BOC Rate decision normally occurs before the announcement of the decision. In such cases, it is too early to make a long-term forecast.
For a long time now, a number of analysts and economists have been forecasting that the Bank of Canada will most likely maintain its control on the interest rates, in the initial stages of its term of office. Such analysts believe that the Bank of Canada might consider raising the interest rates to support the economy.
Some of these analysts have even had the courage to predict that the Bank of Canada will keep rates unchanged during the next three years. These forecasts can be seen as “what if” scenarios.
In current monetary policy environment, the Bank of Canada has adopted two policies: Aggressive Monetary Policy and Steady Dips in Rates. Most people have praised the Bank of Canada for adopting this policy.
The perception of most people is that the Bank of Canada is finally attempting to revive the Canadian economy. However, with only a slow recovery in the economy as the result of the Central Bank’s monetary policy, many are saying that it will be hard for the Canadian dollar to go up.
Consequently, we must take into account what the current scenario says about the value of the Canadian currency. For now, it appears that the Canadian dollar has depreciated slightly since the Bank of Canada’s first rate-setting meeting last October.
Currently, some analysts believe that the Bank of Canada will keep rates unchanged during the next three years. If you’re wondering how to predict the movement of the Canadian dollar, consider some of the analysis presented in this article.
First, keep in mind that the current scenario is complicated. Keep in mind that the central bank is dealing with a difficult situation.
As a result, it is hard to assess how the economy will fare in the near future. Therefore, when it comes to predicting the movement of the Canadian dollar, we must look at the longer-term implications of the current monetary policy and the BOC Rate Decision.
Second, we must keep in mind that even in the current situation, the market is highly volatile. Therefore, we cannot expect any assurance regarding the movement of the Canadian dollar and the corresponding consequences for the currency.
Third, we must also take into account that the currency is connected to the condition of the economy. If the economic conditions deteriorate further, it will affect the condition of the Canadian dollar.
Thus, to predict the movement of the Canadian dollar it is necessary to assess the economic growth and the political stability. Besides, it is also necessary to take into account all the available information such as the market analysis, the analysis of the political developments, the political activities and the outlook of the economy.