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BOC still worried about low inflation, but USD/CAD falls

The Bank of Canada left the interest rate unchanged at 1% as widely expected, but still warns about inflation. There are “downside risks” to inflation (a term the ECB also uses) and they are becoming more significant.

USD/CAD was trading at 1.1070 towards the release of the statement. After an initial jump in USD/CAD, the pair falls. It is important to note that an important figure was also released in the US– updates coming

Data has been mixed in Canada of late. A good example has been the GDP read, which disappointed on a monthly basis but surprised to the upside on a yearly basis.

The relatively good news which the BOC is cautious about is inflation: they did refer to the rise in inflation but preferred to remain worrisome. Do you they want to maintain a low Canadian dollar?

The US ISM Non-Manufacturing PMI badly disappointed, showing contraction in employment. This triggered USD weakness across the board.


Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.