USDCAD: Short close to the target after less dovish BOC
The Bank of Canada kept interest rates unchanged yesterday, as widely expected. Dropping its usual language about the balance of risks, the Bank of Canada said the current state of monetary policy "remains appropriate.”
The bank moved away from a more pessimistic tone it set in October, when Governor Stephen Poloz said policymakers had actively considered cutting rates.
The bank said more moderate growth is expected after a rebound in the third quarter, and said business investment and non-energy goods exports continue to disappoint. The bank also suggested recent job growth masks weakness in the economy.
The bank noted the rapid backup in global bond yields since the U.S. election on November 8, which it said partly reflected market anticipation that spending by the Trump administration could drive rapid growth in an economy that is already near full capacity. Canadian yields have risen significantly alongside, the bank noted.
The central bank pointed to a "significant" amount of slack in the Canadian economy , but also used language suggesting a rate cut is off the table as global growth picks up.
The CAD strengthened against the USD on Wednesday as the Bank of Canada's rate decision and statement gave investors no reason to interrupt a recent appreciation. The gains came even as prices for oil, a major Canadian export, slid on bearish U.S. petroleum inventory data and doubts that production cuts promised by OPEC and Russia would be deep enough to end a supply overhang that has weighed on markets for more than two years.
Our short-term USD/CAD short is close to its target now.
GrowthAces.com - Daily Forex Trading Strategies
The bank moved away from a more pessimistic tone it set in October, when Governor Stephen Poloz said policymakers had actively considered cutting rates.
The bank said more moderate growth is expected after a rebound in the third quarter, and said business investment and non-energy goods exports continue to disappoint. The bank also suggested recent job growth masks weakness in the economy.
The bank noted the rapid backup in global bond yields since the U.S. election on November 8, which it said partly reflected market anticipation that spending by the Trump administration could drive rapid growth in an economy that is already near full capacity. Canadian yields have risen significantly alongside, the bank noted.
The central bank pointed to a "significant" amount of slack in the Canadian economy , but also used language suggesting a rate cut is off the table as global growth picks up.
The CAD strengthened against the USD on Wednesday as the Bank of Canada's rate decision and statement gave investors no reason to interrupt a recent appreciation. The gains came even as prices for oil, a major Canadian export, slid on bearish U.S. petroleum inventory data and doubts that production cuts promised by OPEC and Russia would be deep enough to end a supply overhang that has weighed on markets for more than two years.
Our short-term USD/CAD short is close to its target now.
GrowthAces.com - Daily Forex Trading Strategies
