TheÂ Canadian dollar today appreciated against its American counterpart after theÂ Bank ofÂ Canada‘s interest rate decision, which was widely anticipated. TheÂ loonie’s rally served toÂ drive theÂ USD/CAD currency pair toÂ fresh 2-day lows even asÂ theÂ BoC hinted atÂ aÂ hawkish stance onÂ future monetary policy decisions.
TheÂ USD/CAD currency pair today dropped from aÂ high ofÂ 1.3174 toÂ aÂ low ofÂ 1.3097 following theÂ BoC announcement.
TheÂ currency pair headed lower after theÂ Bank ofÂ Canada decided toÂ raise its overnight rate target byÂ 25 basis point toÂ 1.50%, which was inÂ line with expectations. InÂ his speech after theÂ rate announcement, BoC Governor Stephen Poloz stated that theÂ situation inÂ Canada was more concrete after theÂ US tariffs came into effect. However, he cautioned that further tariff increases could lead toÂ higher inflation andÂ would slow down theÂ country’s economy, which would increase theÂ pricing pressures onÂ theÂ economy. He further stated that theÂ Canadian economy was atÂ aÂ good place.
TheÂ Canadian dollar struggled toÂ maintain its gains against theÂ greenback, which was stronger against most ofÂ its rivals, asÂ tracked byÂ theÂ US Dollar Index. TheÂ latest tariffs imposed onÂ $200 billion ofÂ Chinese exports toÂ theÂ US byÂ Donald Trump‘s administration have boosted theÂ US dollar, which is regarded asÂ aÂ safe haven.
TheÂ currency pair’s future performance is likely toÂ be affected byÂ geopolitical events, tomorrow’s US CPI report, andÂ Canadian house price index.
TheÂ USD/CAD currency pair was trading atÂ 1.3127 asÂ atÂ 16:24 GMT having dropped from aÂ daily high ofÂ 1.3174. TheÂ CAD/JPY currency pair was trading atÂ 85.04 having risen from aÂ low ofÂ 84.20.
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