Forex glossary
Bank of Canada (BoC)
The Bank of Canada (BoC) is Canada's central bank. It conducts monetary policy partly through its target overnight rate, announced on eight fixed dates each year. Decisions and guidance can affect CAD expectations; the exchange-rate response also depends on prior pricing and other information.
Illustrative example
How does it work in practice?
In a hypothetical announcement, the BoC keeps its overnight target at 3% while allowing for later cuts. A trader compares the message with expectations; an unchanged rate alone does not determine whether USD/CAD rises.
A case to work through
Three dates
A hypothetical file contains a BoC announcement and a broker funding table with different dates.
- Record the policy-rate name and effective date from the announcement.
- Record the instrument and funding-charge time from the broker table.
What follows? Keep the two sets of information in separate columns.
Example boundary: A policy rate alone cannot calculate a particular position's funding cost.
A useful distinction
Bank of Canada (BoC) / Central Bank Rate Decision
BoC is Canada's central bank; a rate decision is an action used by different central banks.
Check your understanding
Distinguish announcement, effective and funding-charge dates.
Show the answer and explanation
The applicable instrument funding table
The specification sets account terms.
Reading central-bank decisions
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Read the fuller explanation
Related terms
Sources and documentation
- Policy interest rate – Bank of Canada
Identifies the Bank of Canada's policy rate and announcement versus effective timing.
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The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.