This week, the Bank of Canada (BOC) is expected to lower the interest rate by 0.25%, from 3.25% to 3.00%, for the sixth consecutive meeting. This decision comes after Canada’s December CPI was lower than expected, showing slower inflation and concerns about the economy weakening. The market has already factored in this rate cut.
In addition, the 25% tariffs imposed by the Trump administration have limited the rise of the Canadian dollar. Furthermore, Trump’s demand for OPEC to lower oil prices caused oil prices to fall, which also put downward pressure on the Canadian dollar.
Despite these negative factors, the CAD/JPY has remained steady, which suggests that the market may have already reacted to all the bad news.
If the Trump administration avoids tariffs on China and shows leniency toward Canada, it could lead to more demand for the Canadian dollar in the future.
This week’s CAD/JPY forecast range: 110.20–107.80 yen
Note: The above information does not guarantee profits. Please make your own decisions when trading.