• Financial institution of Canada stands pat on financial coverage, preserving its key rate of interest unchanged at 4.50%, according to expectations
  • The financial institution retains a bearish steering, signaling that it’s going to maintain borrowing prices at present ranges whereas assessing the cumulative results of previous tightening measures
  • USD/CAD extends positive aspects after BoC’s determination

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The Financial institution of Canada in the present day concluded its second financial coverage gathering of 2023. According to consensus estimates, the establishment led by Tiff Macklem voted to maintain its benchmark rate of interest unchanged at 4.50%, after elevating borrowing prices at every of its earlier 9 conferences.

In its assertion, BoC mentioned that the financial system has advanced as anticipated, noting that the labor market continues to be very tight, and that inflation stays elevated, however underscored that CPI is anticipated to average and are available all the way down to round 3% in the midst of the yr on the again of weaker development within the coming quarters.

By way of the coverage outlook, the financial institution retained a dovish steering, indicating that it’s going to maintain borrowing prices at present ranges, conditional on financial developments evolving broadly according to forecasts. This can be an indication that the terminal fee has been reached – a damaging end result for the Canadian greenback.

Instantly after the central financial institution launched its determination, USD/CAD prolonged positive aspects, rising to its highest degree since November 2022 close to the 1.3800 deal with. With the Fed hell-bent on extending its tightening marketing campaign and BoC on pause for the foreseeable future, the Canadian greenback is prone to exhibit a bearish bias within the close to time period. This implies USD/CAD may quickly retest its 2022 highs.

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US Greenback Rallies as Powell Points Hawkish Pledge, Indicators Larger Peak Charges

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