Skip to content

XTB TRADEBEAT

BOC keep rates on hold but less hawkish rhetoric weighs on CAD

Summary:

  • Bank of Canada keeps overnight rate at 1.0%
  • Less hawkish statement sees Canadian dollar fall lower
  • USDCAD holds above prior swing level at 1.2665

The Bank of Canada have kept their overnight rate on hold at 1.0%, but the Canadian dollar has come under some selling pressure after a dovish shift is apparent in the accompanying statement. 

link do file download link

 The Canadian dollar has dropped across the board since the release. Source: xStation

Despite throwing a surprise just two meetings ago the latest Bank of Canada rate decision was inline with consensus expectations. However, some dovish - or less hawkish - rhetoric has weighed on the Canadian dollar which is now falling across the board. 

Key quotes from the statement were as follows:

  • Economic growth moderating as expected in October’s MPR
  • Continue to be cautious on rate moves
  • Labour slack ongoing despite job growth, improved wages

Today’s rate decision has seen a sharp move higher in the pair which has rallied by around 100 pips in the past half an hour since the release. 

link do file download link

 USDCAD rallied strongly after the announcement, gaining around 100 pips. Source: xStation

We pointed out yesterday that the USDCAD had approached a key level around 1.2665 and despite a brief dip below here yesterday the market managed to close back above it. The latest move higher has seen price move away after respecting this prior swing level. 

link do file download link

 Longer term the market appears to have respected support around 1.2665. Source: xStation

 

Disclaimer

This article is provided for general information purposes only. Any opinions, analyses, prices or other content is provided for educational purposes and does not constitute investment advice or a recommendation. Any research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Any information provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.

Past performance is not necessarily indicative of future results, and any person acting on this information does so entirely at their own risk, we do not accept liability for any loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.