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Commenting on the Bank of Canada’s surprise decision to cut the policy rate by 50 basis points, Governor Poloz said the policy action is meant to buttress the business confidence. “I believe the storm is temporary but events could be prolonged,” Poloz argued.

“The main fundamental that changed since last week is that oil prices fell,” Poloz added. “We have a variety of other tools in the tool kit. The bank can put plenty of liquidity into the hands of the banks if needed.”

USD/CAD reaction

After spiking to 1.3980 area with the initial reaction to the BoC’s announcement, the USD/CAD pair retreated slightly and was last seen trading at 1.3923, down 0.03% on the day.

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