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This is a pretty busy week for the CAD. Tomorrow’s rate decision is just the first of several major data points that could move the currency. There is an overwhelming consensus that the BOC will keep rates on hold one more time. But there is also a growing number of analysts who think monetary policy is out of step with reality. So, hold, but maybe more of a dovish tone in the statement.

The latest data – key among them Q3 GDP – has been in line with the central bank’s views and market expectations. Basically, the economy keeps running at the same pace as earlier in the year, with similar results. The trouble is, it’s below historic trends, and is causing increased pressure on regulators to do something.

The Market Reaction

What we’ll be looking for is any indication in the Rate Statement that what is called an “insurance cut” is being considered by the Bank. So far, Governor Poloz has been adamant that policy has been adequate, keeping a...

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