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CAD Predictions & Global Central Bank Forecast for Week Beginning 19th October

October 19, 2015 - Written by John Cameron

Revised FOMC Rate Speculation Left CAD, AUD, NZD Exchange Rates Fluctuating



Global equities ended last week’s session on a high, signalling a continued improvement in worldwide investor sentiment following late August’s sharp flight to safety. Decreased bets on a US interest rate hike this year helped to reassure nervous market participants, but analysts forecast that this week’s session could reignite those same policy tightening fears.

Canadian Dollar Forecast: BOC Interest Rate Decision to Impact Exchange Rate Trading



Two major global central banks make their latest monetary policy decisions before the weekend market shutdown, with the Bank of Canada (BoC) leading the way on Wednesday afternoon. Although the BoC is widely expected to maintain its current headline lending rate at 0.5%, the tone of the report it concurrently publishes detailing the thinking behind its decision will be closely monitored by market participants.

Chinese Slowdown Concerns Predicted to Drive CAD to Pound, US Dollar, Euro Volatility



The Canadian economy remains heavily dependent upon the export of its raw materials to foreign markets, so the backdrop of soft economic data from the world economy’s principal driver of economic growth – China – means that the comments from Canada’s rate-setters have the potential to be market moving. Look for any allusion to weakening demand from the Far East or more expected turbulence in China’s share markets could readily spook investors. The upshot would clearly send the Pound Sterling Canadian Dollar exchange rate higher, but the knock-on effect would transcend Canada’s’ borders; expect Sterling to also record renewed gains against the high-yielding Australian and New Zealand Dollars in such an instance.

EUR NEWSFLASH: ECB Interest Rate Announcement Ahead, CAD/EUR Fluctuations Forecast



Central bank watchers won’t have to wait long for the next risk event of note following the BoC’s publication – the European Central Bank (ECB) monetary policy decision is announced on Thursday afternoon and last week’s commentary from senior policymaker Ewald Nowotny adds interest to the ECB’s commentary. Nowotny suggested that risks to the global economic recovery are now so pronounced that his central bank may need to extend its current €65bn per month Quantitative Easing programme beyond its current finishing date of Autumn 2016.
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