Canada dollar losing ground running up to rate decision tomorrow

Market Updates

Despite a Labour Day bank holiday, yesterday in the US, the Loonie lost more ground to the US dollarto close at 1.29300 after reaching a recent high last Friday at 1.31471,. The previous week the Canadian dollar managed a small rally, raising by 2.1%, mostly on the back of US dollar weakness.

This week could prove a bumpy ride for the Canadian currency as tomorrow there will be a scheduled monetary policy meeting by the Bank of Canada at 3pm. The general forecast is for the central bank to maintain interest rates at the current level of 0.50%. 

All eyes will be on the following statement and to what clues it may hold as to the timing of further interest rate cuts. At the previous meeting the central bank had cut is forecast for the Canadian economy by 0.3%, which did not justify additional monetary loosening.

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