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