• USD/CAD trims some of its daily losses, despite BoC ending QE.
  • USD/CAD plunged 130 pips once the central bank released its monetary policy decision.
  • Bank of Canada will begin the "reinvesting phase," meaning a replacement of maturing bonds for new ones.
  • Bank of Canada: If inflation is stickier than expected, the bank will act to bring it down.

The USD/CAD slumps for the first time in the week, down 0.25%, trading at 1.2358 during the New York session at the time of writing.  Earlier 30-minutes into the New York stock market session, the Bank of Canada (BoC) released its monetary policy statement announcing the ending of its weekly pandemic bond-purchasing program. 

Furthermore, the BoC decided to keep interest rates unchanged. However, investors' expectation towards the QE was a reduction in its weekly purchases from CAD 2 billion to CAD 1 billion. Instead, the central bank decided to halt its stimulus, as the threatening of stickier inflation clouds the economic growth.

The USD/CAD pair reaction to the BoC decision

Before the announcement, the pair was trading at 1.2430 but plummeted on the announcement 130 pips, touching the daily low at 1.2300.

BoC Governor Tiff Macklem: We will consider raising rates sooner than we had previously thought

One hour after the release of the Statement, BoC Governor Tiff Macklem held a press conference. He said that despite the bank's decision to finalize the QE program, significant stimulus to the economy would remain in the palace. 

The end of QE comes as increasing vaccination rates are enabling continued progress in the economic recovery in Canada and around the world", said the BoC in the opening statement.

Additionally,  the central bank announced that it would end the QE program, but it will begin the "reinvesting phase." The BoC will purchase bonds only to replace those maturing, meaning that the overall holdings remain stable over time. 

Further, Macklem added that he believes there are good reasons for inflation to ease in 2022 but warned that if they see signs of prolonged inflation, they will take action to curb elevated price pressures.

USD/CAD

Overview
Today last price 1.2354
Today Daily Change -0.0036
Today Daily Change % -0.29
Today daily open 1.239
 
Trends
Daily SMA20 1.2478
Daily SMA50 1.2592
Daily SMA100 1.252
Daily SMA200 1.2495
 
Levels
Previous Daily High 1.2397
Previous Daily Low 1.235
Previous Weekly High 1.241
Previous Weekly Low 1.2288
Previous Monthly High 1.2896
Previous Monthly Low 1.2494
Daily Fibonacci 38.2% 1.2379
Daily Fibonacci 61.8% 1.2368
Daily Pivot Point S1 1.2361
Daily Pivot Point S2 1.2333
Daily Pivot Point S3 1.2315
Daily Pivot Point R1 1.2408
Daily Pivot Point R2 1.2425
Daily Pivot Point R3 1.2454

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD stays pressured towards 1.1300 as USD cheers risk-off mood

EUR/USD remains on the back foot near 1.1300, two-week lows. Market sentiment remains sour, as Russia-Ukraine worries join pre-Fed anxiety. The Treasury yields pause four-day downtrend while the dollar stays underpinned amid risk-off trading. US CB Consumer Confidence awaited ahead of the Fed decision.

EUR/USD News

GBP/USD is testing critical hourly support

GBP/USD is holding tight in somewhat bearish territory below 1.35 the figure. Sterling dropped on Monday to its lowest in three weeks versus the US dollar, with traders moving out of risk and into safe havens due to the expectations of Fed tightening and escalating tensions between Russia and Ukraine.

GBP/USD News

Gold approaches $1,848 yearly hurdle as risk sentiment dwindles

Gold holds on to the week-start rebound towards the yearly resistance line, dribbles around $1,842 during early Tuesday morning in Europe. Risk assets remain on the back foot as pre-Fed anxiety joins Russia-led geopolitical risks.

Gold News

Decentraland price not out of the woods yet, MANA bears prepare for 28% decline

Decentraland price could be headed for a further decline as MANA continues to drop toward the bearish target projected by a pessimistic chart pattern. The token is at risk of a 28% plunge toward $1.46 if the 200D SMA fails to act as a reliable foothold.

Read more

Make or break week

It could be a make or break week for the markets, with the Fed meeting on Wednesday, big tech earnings, and ongoing tensions on the Ukraine/Russia border. That may sound a bit over the top given how deep a correction we've already seen.

Read more

Forex MAJORS

Cryptocurrencies

Signatures