In the midst of a stable trading session and the absence of strong economic events, the markets are awaiting the results of the Bank of Canada meeting today, Wednesday, December 8th, in the American session, where the Bank of Canada will announce its monetary policy and interest rates, and expectations are to keep monetary policy unchanged and keep interest rates at 0.25%.

In the last meeting of the Bank, at the end of October, the Bank ended the monetary stimulus program and the purchase of bonds, which had started working on it since the beginning of the Corona pandemic crisis, and the Bank hinted that it is ready to raise interest rates in April of next year to limit the continuous rise in inflation.

The annual inflation in Canada rose in October to 4.7%, the fastest pace of growth since February 2003, while the monthly index rose to 0.7% to continue recording 7 monthly readings higher than the central bank’s annual target of 1-3%.

In addition to the rise in inflation prices, the economic data issued by the Canadian economy, the latest of which was the labor market data last week, which greatly exceeded expectations, improved after the economy added 153 thousand jobs in November, to come four times higher than expected, with unemployment rates falling to 6% to reflect the return of the level of employment to a stage Full employment and a return to pre-pandemic levels, so the bank must fight inflation now.

The markets are now pricing in about 5 interest rate hikes next year and pricing the first hike next March, but with the assessment of recent data and the entry of the Omicron variable on the forefront of events, the bank today may give a hint that the hike may be closer than the markets expect it may be even at the January meeting .

The movements of the Canadian dollar affected in advance by the movements of crude prices, up more than 200 points since the beginning of the week, will be subject to the statement issued by the bank today in the American session, and whether the bank will emphasize high inflation or keep its hint of tightening in next April.

The Canadian dollar is recording some declines and is trading at 1.2646 levels against the US dollar this morning, Wednesday.