The Central Bank of Canada is heading to raise interest rates by 50 basis points to reach 1.50% at its meeting this evening, Wednesday, the first of June (June) for the second month in a row, in the first increase of its kind in two decades and for the third month in a row in terms of raising interest rates with continued inflation rises.

The last reading of inflation from Canada came at its highest level since January 1991 at 6.8%, with an increase in food prices, which is more than doubled, compared to the bank’s target of 2-3%.

The statements of the Governor of the Central Bank of Canada Macleam in April supported the expectations of the markets to raise interest rates by 50 basis points, and did not rule out the possibility of even a slight increase by 75 basis points at the June meeting, especially since the Canadian economy depends mainly on commodities and with the continued rises in commodities from oil to aluminum and wheat, not We rule out that the bank will move with the maximum of its tools to curb the rise in inflation.

The growth data released yesterday by the Canadian economy, which showed that the economy grew at an annual rate of 3.1% in the first quarter of the year, compared to 6.6% in the fourth quarter, proves that the Canadian economy is still strong, and the growth numbers are unlikely to affect the bank’s decisions today to tighten monetary policy and proceed Moving forward in curbing high inflation.

The Canadian dollar started pricing the hike by 50 basis points at a large rate, with its increases of more than 350 points, at its highest level in May against the US dollar.

Therefore, we are not expected to witness strong movements unless the move comes by 75 basis points, as until the moment expectations of this percentage do not exceed 25 Or the bank hinted at a continuation of the 50-point rate hike in the next meeting.

The focus will also be on the statement accompanying the bank and the hints that will be issued by the bank’s president regarding the increases in the coming period.

Will the 50 basis point increases continue, or will the bank mitigate them?

Will we see the peak at 3% rates by the end of the year, or will it be at lower levels?

Expected scenarios Raising by 50 basis points, with the hint that it will not be the last, and that the central bank will use as much as it can to curb inflation.

A 75 basis point hike We will witness strong gains for the Canadian dollar before the markets return to review the details and determine the future movement of the pair.

Surprising the markets and raising interest rates by 25 basis points, we will witness strong declines for the Canadian dollar