TheÂ Canadian dollar today rallied against its US counterpart driving theÂ USD/CAD currency pair toÂ new lows after theÂ Bank ofÂ Canada announced its interest rate decision. TheÂ loonie’s rally was further boosted byÂ disappointing releases from theÂ US docket such asÂ theÂ weak quarterly GDP data.
TheÂ USD/CAD currency pair today crashed from aÂ high ofÂ 1.3039 toÂ aÂ low ofÂ 1.2839 losing about 200 points after theÂ BoC statement.
TheÂ currency pair was onÂ aÂ downtrend from theÂ early European session with aÂ brief rally inÂ theÂ early American session before theÂ Bank ofÂ Canada’s interest rate decision. TheÂ BoC kept interest rates atÂ theÂ same level, that is atÂ 1.25%, which was inÂ line with expectations, but it was theÂ bank’s monetary policy statement that triggered theÂ loonie’s rally. ForÂ theÂ first time, BoC Governor Stephen Poloz expressed optimism regarding workers wages, overall consumption levels, andÂ economic growth inÂ theÂ country. This statement indicated that theÂ BoC was abandoning its cautionary stance, which raised investors’ hopes ofÂ aÂ rate hike inÂ July.
Several releases from theÂ US docket such asÂ theÂ quarterly GDP data released byÂ theÂ Bureau ofÂ Economic Analysis, andÂ theÂ personal consumption data, both ofÂ which missed expectations contributed toÂ theÂ greenback’s overall weakness. TheÂ ADP employment change report also missed expectations.
TheÂ currency pair’s future performance is likely toÂ be influenced byÂ tomorrow’s Canadian GDP data andÂ US PCE report.
TheÂ USD/CAD currency pair was trading atÂ 1.2842 asÂ atÂ 15:48 GMT having crashed from aÂ high ofÂ 1.3039. TheÂ CAD/JPY currency pair was trading atÂ 84.84 having rallied from aÂ low ofÂ 83.17.
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