Breaking: USD/CAD jumps above 1.3130 as BoC refrains from committing to rate hikes

Bank of Canada says degree of accommodation remains appropriate.
Notes ongoing trade tensions are having a material effect on global economic outlook.

FXStreet Team FXStreet

As widely expected, the Bank of Canada decided to maintain its target for the overnight rate at 1.75% at its July policy meeting. The bank refrained from hinting at the next policy move in its statement. With the initial market reaction, the USD/CAD pair gained more than 50 pips and erased its daily lows to turn positive on the day above 1.3130. Below are some key takeaways from the BoC's policy statement, as reported by Reuters.

"Degree of accommodation remains appropriate."

"Canadian economy returning to potential growth but outlook is clouded by persistent trade tensions."

"Raises annualized Q1 GDP forecast to 0.4% from 0.3%, raises Q2 forecast to 2.3% from 1.3%, forecasts Q3 GDP of 1.5%."

"Q2 growth stronger than predicted due to temporary factors, including reversal of weather-related slowdowns and a surge in oil output."

"Ongoing trade tensions are having a material effect on global economic outlook; escalation of trade conflicts remains biggest downside risk to global and canadian outlooks."

"Cuts 2019 global growth forecast to 3.0% from 3.2%, cuts 2020 global growth forecast to 3.2% from 3.3%."

"Ntional housing market stabilizing with significant adjustments still taking place in some regions; decline in longer-term mortgage rates is supporting housing activity."

"Overall inflation rate will likely dip this year because of the dynamics of gasoline prices and other temporary factors, expected to drop to 1.6% in Q3 before rising to 2.0% in Q4."

"Will pay particular attention to developments in energy sector and impact of trade conflicts."

"Investment in oil sector expected to stabilize by 2020 and exports should gradually increase; consumer spending expected to grow steadily."

"Estimates that China trade actions against canola and meat products will cut Canadian exports by about 0.2% over q2 and Q3."

Author

FXStreet Team

FXStreet

EUR/USD looks apathetic around 1.1770

EUR/USD comes under renewed pressure on Tuesday, deflating below the 1.1800 support and reversing two consecutive days of gains. The pair’s decline follows the persistent move higher in the US Dollar, as trade uncertainty dominates the sentiment ahead of President Trump’s SOTU speech.

GBP/USD regains 1.3500 and above

GBP/USD extends its advance for the third day in a row on Tuesday, this time retesting the area beyond the 1.3500 hurdle. Cable’s uptick comes despite decent gains in the Greenback and the dovish message from the BoE’s Bailey at the UK Parliament.

Gold appears offered around $5,150

Gold is giving back a good portion of the recent multi-day rally, receding to the $5,150 zone per troy ounce amid the decent bounce in the US Dollar and mixed US Treasuty yields. In the meantime, markets’ attention remain on upcoming comments from Fed speakers.

Ripple’s DeFi shift in focus: Navigating XRPL EVM sidechain growth, XRPFi migration and liquidity

Ripple (XRP) has continued to trade under pressure, extending its decline by approximately 63% from the record high of $3.66 in July. The remittance token is trading above support at $1.35, while its upside appears limited by key supply zones, starting with $1.40, at the time of writing on Tuesday.

The Citrini report: How a debatable AI narrative can shake Wall Street

That AI-related headline alone was enough to rattle investors.US stocks slid sharply on Monday after a widely circulated Citrini Research memo outlined a hypothetical “2028 Global Intelligence Crisis”, warning that rapid AI adoption could push US unemployment into double digits as early as by mid-2028.

XRP pressured by weak ETF flows and declining retail interest

Ripple (XRP) is edging lower, trading above its intraday low of $1.32 at the time of writing on Tuesday. The decline from its weekly opening of $1.39 reflects heightened volatility in the broader cryptocurrency market, accentuated by tariff-triggered uncertainty.