What it measures
The Bank of Canada sets monetary policy by changing its target for the overnight rate. That rate guides the prime rates banks charge and, through them, borrowing costs across Canada.
Who publishes it and when
The Bank announces its decision on eight fixed dates a year at 09:45 Toronto time. In January, April, July and October the decision comes with the Monetary Policy Report and new projections.
How it is put together
The decision is taken by the Bank's Governing Council. Its aim is to keep inflation at 2%, the midpoint of a 1% to 3% target range agreed with the federal government.
What traders watch
Traders read the statement for hints about future moves, compare the projections with the previous report, and watch oil prices, which matter a lot for Canada's economy, around the decision.
How markets have usually reacted
A rise or a firmer tone has often lifted the Canadian dollar against the U.S. dollar; a cut or softer guidance has often weakened it. The move is often judged relative to what the Federal Reserve is doing at the same time.
Common mistakes
- Reacting to the rate alone. When the decision itself is expected, the statement, the vote and the press conference usually decide the move.
- Trading the first seconds: spreads widen and prices can jump in both directions before settling.
- Forgetting the press conference: it starts after the statement and can move the market a second time.
How a higher or lower figure is usually read
A rate rise is usually read as supportive for the Canadian dollar and a cut as negative. When no change is expected, the guidance matters most. Not a signal.
Release history
| Date | Period | Actual | Previous |
|---|---|---|---|
| — | 2.50% | 2.25% |
Related news
- Canada Consumer Price Index (CPI)
- Canada Employment Change
- Canada GDP (monthly)
- FOMC Rate Decision (Federal Reserve)
- Economic calendar: every release this week in your time zone
- Lot size calculator: keep your risk the same around news
- How to use an economic calendar: what happens around a release, and how to plan for it
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Official source
Source: Bank of Canada. Bank of Canada content is available free of charge at bankofcanada.ca.
Published by Bank of Canada: www.bankofcanada.ca