Next week, the Bank of Canada (BoC) will have its monetary policy meeting for interest rate announcement.

However, there is no significant change in rates from what was agreed upon in the January meeting is expected. At the January 25 meeting, the bank’s governing council decided to raise the rate by 25 basis points, to 4.5% and signalled a pause to further rate increases.

Analysts at TD Securities are of the view that the forward guidance is not expected to change significantly from the January meeting.

“The downside surprise on Q4 GDP should allow the BoC to look past the blockbuster January jobs number and keep the overnight rate unchanged at 4.50%. The forward guidance is not expected to change too much from January, though the BoC might want to put more emphasis on the conditional nature of its pause.”

Currency pairs affected

The analysts say:

“A low-energy BoC meeting would likely direct CAD’s focus to the evolving global narratives. We see USDCAD holding the 1.33/1.37 range unless US inflation goes awry this month. In turn, we prefer to play CAD on crosses (recently closing NZDCAD) where scaling into AUDCAD longs appeals to the shift in global growth drivers.”

Past BOC interest rate changes

Date	Target (%)	Change (%)
January 25, 2023	4.50	+0.25
December 7, 2022	4.25	+0.50
October 26, 2022	3.75	+0.50
September 7, 2022	3.25	+0.75
July 13, 2022	2.50	+1.00
June 1, 2022	1.50	+0.50
April 13, 2022	1.00	+0.50
March 2, 2022	0.50	+0.25
January 26, 2022	0.25	—
December 8, 2021	0.25	—
October 27, 2021	0.25	—
September 8, 2021	0.25	—

Source: Bank of Canada

Upcoming BOC events

March 8	Interest rate announcement
April 12	Interest rate announcement and Monetary Policy Report