USD/CAD Rallies Higher on BoC Rate Decision

The USD/CAD rallied higher by over 100 points after the Bank of Canada released its monetary statement leaving interest rates unchanged at 1.00%. The US dollar rallied against the commodity-linked loonie even as global oil prices traded at daily lows.

The USD/CAD currency pair rallied by over 130 points from a daily low of 1.2649 to hit a high of 1.2787 after the BoC statement and was on an uptrend at the time of writing.

The currency pair had been trading in a downtrend below the 1.27 handle for most of today’s session before the BoC rate announcement. Investors interpreted the Bank of Canada statement as being dovish given that the bank stated that it would take a cautious approach towards raising interest rates in future. The bank noted that employment growth was strong and wages showed improvement, which led to robust consumer spending in the third quarter. Depressed global oil prices as tracked by the West Texas Intermediate, which was trading below the $57.00 mark for most of today’s session, also contributed to the loonie’s weakness against the greenback.

The greenback’s rally against the loonie was further boosted by the ADP employment change report, which was in line with expectations. The greenback’s performance against its peers was above par as tracked by the US Dollar Index, which hit a daily high of 93.64.

The currency pair’s future performance is likely to be affected by global oil prices and the release of US jobless claims data tomorrow.

The USD/CAD currency pair was trading at 1.2783 as at 16:30 GMT having rallied from a daily low of 1.2649. The CAD/JPY currency pair was trading at 87.84 having dropped from a high of 88.72 earlier today.

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