After a 25-basis-point hike, how far do you expect the loonie to move?

The Bank of Canada's 28 October decision moved its overnight rate target from 2.25% to 2.50% (Bank of Canada: key interest rate). Whether a currency moves much on a change of that size depends less on the number itself than on how much traders had already expected it, and on the words that come with the decision.

Before you set a target for the loonie, check three things: what the market had priced in beforehand, what the bank said about its next steps, and how the September inflation reading of 3.1% on the year compares with the bank's view (Canada's September CPI). Interest rate gaps between countries are one of the main ways rate moves reach a currency pair, and carry trade explained shows how that gap is used in a position.

We would like to hear how you size the expectation:

• What do you use to judge whether a move was priced in before the decision?
• How far do you expect a currency to move on a small rate change, and what would surprise you?
• Do you size the trade to the move you expect, or to the stop you can accept?
• Have you traded a rate change that the currency ignored? What did you change afterwards?

If you want the wider picture on how the bank's rate reaches the economy, see the BoC trade-off analysis.

Please share your own approach and reasoning, not calls for others to copy. Posts that promise a direction or sell signals will be removed.