• 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. 

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 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. 

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 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. 

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