Quote:
Originally Posted by bullman
hi,
This pair is one of my favourites. I believe next week 20 Jan there will be a rates annoucement for CANADA. I did some research and I believe there will be a rate cut and I hope SO. I will long the USD/CAD next week.
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I hope you are not taking a long bias just because of the rate decision. If you have come to the conclusion that the BoC is going to cut on the basis of sound fundamentals, it is likely that the rest of the market is expecting the same. If that is the case, they are already adjusting their positioning now to account for such an outcome.
With an official consensus (according to a bloomberg poll of economists) calling for a 50 bps, I think you should consider this the standard for what would leave the market unaffected. No cut would spur the Canadian dollar higher while a deeper cut or commentary to suggest ongoing cuts would keep impart USDCAD with some buoyancy.
