The Bank of Canada's governor, Stephen Poloz is scheduled to speak later in the day today at 20:15 GMT. Governor Poloz's speech comes following the Bank of Canada's decision to leave interest rates unchanged at its monetary policy meeting that was held last week. This will also be his second public speaking engagement this week.
Earlier this week, the BoC Governor Poloz, in another speaking engagement, the BoC governor gave an upbeat assessment of the Canadian economy. He said that despite a longer and a deeper than expected slowdown in Canada's economy in the first quarter, he expected growth to pick up.
Poloz said that the current economic conditions still warranted further rate hikes this year, maintaining the same stance from the BoC's monetary policy meeting last week. Poloz gave encouraging news that policy makers were confidence that growth across wages, inflation and household sensitivity to higher interest rates would see progress.
Canada's inflation rate has remained steady around the BoC's 2% inflation target rate. While consumer prices are expected to fall in the months ahead, the central bank officials are confident that inflation will eventually average near the 2% threshold despite further rate hikes.
Based on the above, today's binary trading signal is USDCAD. Despite the strong fundamentals and higher oil prices, the USDCAD has remained on the upside. The Canadian dollar continues to remain weak against its U.S. counterpart.
Following the rally toward 1.2838, the currency pair was seen stalling. In the near term, we expect to see a pullback. Therefore, we are looking to purchase daily PUT options in USDCAD at 1.2820 for a 21:00 GMT expiry time.
We expect that USDCAD is most likely to post a correction to the downside and thus close lower on the day.