Few scheduled events move the Canadian dollar like a Bank of Canada rate decision. Interest rates are one of the biggest drivers of any currency, and eight times a year the Bank tells the market where Canada’s are heading.
The next one is on Wednesday, October 28. Here’s how these announcements work, what traders watch, and why my own approach on central bank weeks is usually to stay out of the way.
Where rates stand going into October 28
The Bank of Canada held its policy rate at 2.25% on September 2, its seventh hold in a row since cutting to that level in October 2025. But the tone has shifted. In September, the Bank pointed to high energy prices from the Middle East conflict and the new US tariffs and Canadian counter-tariffs, and flagged that upside risks to its inflation forecast had increased.
Meanwhile, the US Federal Reserve raised rates in September. The gap between US and Canadian rates matters a great deal for USD/CAD, as we covered in what moves USD/CAD intraday.
October 28 also comes with a new Monetary Policy Report, the Bank’s quarterly set of economic forecasts. That makes it more significant than a regular decision: it’s the Bank’s first chance to publish fresh forecasts reflecting the tariffs and energy prices.
How an announcement day works
All times Eastern:
| Time | What happens |
|---|---|
| 9:45 a.m. | Rate decision and statement released. On report months, the Monetary Policy Report comes out at the same time |
| Around 10:30 a.m. | Press conference with the Governor and Senior Deputy Governor |
The market reacts in two waves. The first is to the decision and statement at 9:45. The second comes during the press conference, when the Governor answers questions and the market reads the tone. It’s not unusual for the second wave to reverse the first.
And the timing is awkward: 9:45 a.m. lands just 15 minutes after the stock market opens, one of the most volatile parts of the trading day.
What actually moves the loonie
The rate decision itself is often fully expected. When all the economists polled forecast a hold, as they did in September, a hold barely moves the market. What moves the loonie is anything the market didn’t expect:
- A surprise decision. A cut or hike nobody priced in causes the biggest moves.
- The statement’s language. Words like “prepared to adjust” or a change in how the Bank describes inflation risks can shift expectations for future decisions.
- The forecasts. On Monetary Policy Report days, changes to the Bank’s inflation and growth projections can matter as much as the rate.
- The press conference. The Governor’s answers can sound more or less concerned than the written statement.
As with economic data, it’s the surprise, not the number. Our guide to Canadian CPI and jobs data explains why the inflation numbers going into a decision matter so much.
Surprises do happen
A reminder of what a real surprise looks like: in January 2015, with oil prices collapsing, the Bank of Canada unexpectedly cut its rate when markets expected no change. The loonie fell sharply within minutes. Traders positioned for a quiet hold took heavy losses, and in a move like that, prices can skip past stop losses.
Other big Bank of Canada moments came in March 2020, when the Bank made emergency cuts as the pandemic hit, and in June 2024, when it became the first G7 central bank to begin cutting rates after the post-pandemic inflation fight.
Surprises are rare. But when they come, they’re exactly the kind of move that wipes out accounts holding too much size. Our guide to margin calls and stop-outs explains how fast that can happen.
My approach: stay out of the way
Here’s what I do. If a central bank is due to announce a rate decision this week, especially in the next day or two, I avoid trading that currency.
So if the Bank of Canada announces next week, I’ll avoid CAD pairs. The same goes for the Bank of England and the pound, the ECB and the euro, and so on.
Why? Because in the days before a decision, currencies often drift without real conviction as traders wait. On the day, the move can be fast and two-sided. And after the press conference, the market sometimes changes its mind completely. None of that is the clean, planned trading I look for. There’s always another currency to trade while that one sorts itself out.
If you do want to trade around a decision, at minimum:
- Know the expectation. What are economists and markets pricing in?
- Don’t hold a large position into 9:45 a.m. unless you’ve planned for a big move against you.
- Wait for the press conference before judging the reaction.
- Reduce size, because spreads and slippage get worse.
- Watch the Fed too. USD/CAD reacts to the gap between the two central banks, not Canada alone.
The bottom line
Bank of Canada decisions come out at 9:45 a.m. Eastern, followed by a press conference, and the loonie reacts to surprises in the decision, the statement, the forecasts, and the Governor’s tone. October 28 matters more than usual: rates have been on hold at 2.25%, the Bank has flagged rising inflation risks, and it will publish fresh forecasts. If you’re not sure how you’ll handle the volatility, the simplest plan is the one I use: avoid trading the currency until the decision has passed.
Disclosure: The author, Mike Harding, founded Academy of Financial Markets in Toronto and teaches its mentorship program. Rate information is as of early October 2026. This article is educational and is not financial advice. Trading foreign exchange carries a high level of risk.