CANADIAN DOLLAR PRICE OUTLOOK: USD / CAD CHARGERS ON THE COURSE DECISION OF THE BANK OF CANADA
- Canadian dollar trades on its hind legs immediately after the latter BoC rate decision
- Bank of Canada keeps interest rates unchanged and reduces weekly QE rate to $ 2 billion
- USD / CAD price measure with the help of the softer Canadian dollar
Canadian dollar bears bend their muscles and try to drive USD/ CAD price is higher this morning. Loonie’s softness comes despite the Bank of Canada’s latest monetary policy update, which simply surpasses market wires that showed a significant decline in the central bank’s QE program.
The NAO decided to reduce weekly asset purchases by a third to $ 2 billion, although this largely met expectations. BoC officials left interest rates unchanged and also reiterated forecasts to ease growth in the second half of next year, with forecasts for GDP and inflation in 2022 modest. Against this background, the Bank of Canada’s Monetary Policy Report also described a small downgrade in its 2021 GDP forecast.
USD / CAD PRICE CARD: 4-hour time frame (June 28 – July 14, 2021)
USD / CAD pricing was in line with these headlines as the initial strength of the Canadian dollar quickly unwinded. This appeared to be a reaction of the knee joint to the main technical support around the 1.2425-1.2450 price range. Canadian government bond yields also came under downward pressure and are likely to contribute to a softer Loonie. This may follow the decline in BoC interest rates at the end of the year, which fell with a 32% probability from 39% before BoC.
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