USD/CAD – CAD weaker on BoC dovish stance

March 6, 2019 Share Print 0

Bank Of Canada Overnight Rate Tgt: Unchanged At 1.75%

Will Take Time To Gauge Persistence Of Below-Potential Growth, Inflation Implications

Policy Makers To Watch Household Spending, Oil Markets, Global Trade Policy

Global Economic Slowdown More Pronounced And Widespread Than Anticipated

Trade Tensions, Uncertainty Weighing Heavily On Confidence, Economic Activity

Global Prospects Would Be Buoyed By Resolution of Trade Conflicts

US-China Trade Talk Progress, China Stimulus Have Improved Market Sentiment

Canada’s 4Q Slowdown Was Sharper, More Broad-Based Than Expected

Canada Consumer Spending, Housing Market Soft

Canada Exports, Investment Came In Below Expectations

Canadian Economy In 1H 2019 Appears Weaker Than Anticipated

Headline Inflation To Be Slightly Below 2% Through Most Of 2019

Bank of Canada Says There Is More Uncertainty About Timing Of Future Rate Increases

The Bank of Canada held its key interest rate steady at +1.75% this morning as weaker global and domestic growth prospects led policy makers to express more caution about the pace of future rate increases.

The central bank said the economic outlook continues “to warrant a policy rate that is below the neutral range, which is currently estimated around 2.5% to 3.5%.”

The more “dovish” tone has the loonie under pressure, trading down -0.65% at C$1.3453. The ‘techies’ see fresh air towards C$1.3650 if the ‘loonie’ closes down above C$1.3450 on Wednesday.

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Dean Popplewell

Vice-President of Market Analysis at MarketPulse

Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.