No acceleration in interest rate moves – CAD falls
Posted on October 20, 2009 by Yohay
Filed Under Forex News | 17 Comments
The BOC Statement remained almost unchanged, with a rate hike not expected in the next 8 months. The Canadian dollar reacted with a plunge across the board.
The rate decision made now by the BOC repeated the previous one from September 10th. The central bank kept the Overnight Rate at the rock bottom level of 0.25%, exactly as expected.
The focus wan’t on this decision, but on the prospects for future rate hikes. Also here, there was no news. Here’s a quote from the statement:
Conditional on the outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010 in order to achieve the inflation target.
This is almost a copy-paste from the previous statement. With no acceleration in inflation, there’s no rush to raise the rates sooner. The end of the second quarter is 8 months away, quite far. Canada will definitely not be the next country to raise the rates.
According to the moves in the market, New Zealand might see higher rates next week.
USD/CAD jumped after the rate statement, from 1.0310 to 1.0380 in a matter of minutes. Low interest rates for a long time are hurting the Canadian dollar.
Also in the “race to parity“, Canada won’t be first – the Swiss Franc will probably get there earlier. USD/CHF went as low as 1.0080 earlier and is moving steadily towards parity.
For more on the loonie, see the USD/CAD Forecast.
Enjoyed the post? You may want to subscribe by RSS feed or Email.Comments
17 Responses to “No acceleration in interest rate moves – CAD falls”
Leave a Reply
Popular Forex Posts
Daily FX Headlines- NZD/USD Classical 09.01 September 1, 2010
- GBP/USD Classical 09.01 September 1, 2010
- GBP/JPY Classical 09.01 September 1, 2010
- EUR/USD Classical 09.01 September 1, 2010
- EUR/JPY Classical 09.01 September 1, 2010
-
Stay up to date!
-
-
[...] a busy day yesterday, that saw the Canadian dollar falling, we have a rather thin calendar today. British meeting minutes and the Beige Book are the [...]
[...] Later in Canada, the BOC Monetary Policy Report will be released. This important report completes the data from the rate statement. The dovish rate statement hurt the Canadian dollar. [...]
[...] BOC was dovish about future rate hikes and also expressed worries about the strong currency. The Canadian dollar plunged after the rate statement, and didn’t recover since then. It now trades at [...]
[...] Mark Carney hurt the Canadian dollar in last week’s rate decision, he has a chance to change that in three public appearances this week. Here’s an outlook for this [...]
[...] Carney, the governor of the BOC, is expected to speak after last week’s dovish statement that hurt the Canadian dollar. Will he say more to hurt the Canadian [...]
[...] being blown away from parity following the rate decision, Canada’s monthly GDP might help the Canadian dollar. The good GDP release in the US could [...]
[...] In the US, weekly Unemployment Claims are expected to stay rather stable at 519K. In Canada, Ivey PMI is expected to take a break and drop this time. Will the loonie recover from the impact of the rate decision? [...]
[...] and will probably talk about future policy. Will he add more dovish statement to those in the recent rate decision? Last time, he stated that Canada’s economic recovery isn’t assured. His speech, on [...]
[...] to the negative GDP last month, that didn’t meet expectations, and the dovish rate statement before that, the situation of the Canadian economy isn’t that [...]
[...] The Canadian economy is recovering slowly, similar to the American one. The recent negative monthly GDP hurt the Canadian dollar that had many reasons to rise. This wasn’t the only problem. Mark Carney, head of the BOC, released a as a dovish rate decision. [...]
[...] prices are expected to rise by 0.2%. Only a higher figure will push Mark Carney to raise the rates earlier than declared. Core CPI, no less important, is expected to remain unchanged this time, after making a small [...]
[...] provide the loonie with the necessary boost to fight the recent greenback’s strength. Mark Carney will not raise the rates earlier than expected. This week’s main event is retail sales, and there are more. A technical analysis will [...]
[...] decision: Mark Carney disappointed in last month’s rate decision by not declaring an earlier time for rate hikes. The text of the BOC Rate Statement hasn’t [...]
[...] jump of 2.9% is predicted in this rather volatile index. A stronger growth is necessary in order to have an early rate hike. Also published on Monday at 13:30 GMT, under the shadow of the GDP [...]
[...] by changing the schedule for a rate hike. The BOC is quite straightforward on future policy. Their current target for a rate hike is by the end of Q2 of 2010. Carney might announce that a hike is possible also in Q1, and this [...]
[...] Carney disappointed in the past by leaving the schedule for a rate hike unchanged. An acceleration will boost the loonie, but also an acceleration in prices is necessary for this to happen. We have all of it this week. Let’s start the review. The technical analysis will follow: [...]
[...] talks: The governor of the central bank made a rather uninteresting rate decision last week, after disappointing last month. He’ll make a public appearance on Wednesday at 18:05 in Toronto and [...]