- Canadian dollar tumbles and holds on to losses after BoC meeting.
- BoC Governor Poloz: The door is obviously open to an interest rate cut
The USD/CAD pair rose further and printed a fresh four week high at 1.3151 after Bank of Canada’s Poloz press conference. Near the end of the session, the pair trades at 1.3145, holding to most of its gains. It is the best performance for USD/CAD in a month.
Blame it on the BoC
At today’s meeting, the Bank of Canada decided, as expected, to keep the overnight interest rate unchanged at 1.75%. In the statement, the BoC was more dovish than market expectations and triggered a decline of the Canadian dollar across the board. It removed the reference to the current rate as “appropriate” and downgraded growth projections for the fourth quarter.
During the press conference, BoC Governor Stephen S. Poloz said the “door is obviously open to an interest rate cut”. The next move will depend on data. He added that interest rates are still really low.
The loonie tumbled after the statement and also following the press conference. The decline in crude oil prices also contributed to the slide, although the key driver was the BoC meeting.
“The CAD took a turn for the worse following the BOC's dovish pivot. With downward revisions to growth and an acknowledgement that they will monitor whether this slowdown is more persistent than forecast in determining the future path of policy has us comfortable in our long USD/CAD position that we initiated at the start of this year. Indeed, we had warned that the market was not giving enough credence to the deterioration in Q4 data”, commented analysts at TD Securities. They have a target for USD/CAD at 1.33.
Technical levels
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.
Recommended content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price bulls keenly await US PCE Price Index on Friday before placing fresh bets
Gold price (XAU/USD) continues with its struggle to make it through the $2,200 mark on Thursday and oscillates in a narrow trading band through the early part of the European session.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
The other terminal rate: How far will policy rates be cut?
Recent communication by the Federal Reserve and the ECB has made it clear that the first cut in official interest rates is coming. Both central banks are saying the same but the ECB communication is more opaque than that of the Fed.