• Entertainment
  • Finance
  • Marketing
  • Real Estate
  • Technology
  • Social
National Journal Community Of e-Experts
Finance 0

The Canadian Dollar: The Bank Of Canada Keeps Applying The Brakes

By Kurt Osterberg · On April 22, 2018

Last June, 2017, Senior Deputy Governor of the Bank of Canada (BoC) Carolyn A. Wilkins stepped onto the stage with a surprisingly bullish message about the Canadian economy. This speech set the stage for the BoC’s rollback of “emergency measure” rate cuts that responded to the collapse in oil prices. At the time, the Canadian dollar strengthened swiftly and sent USD/CAD from around 1.345 to 1.33. USD/CAD trended downward for three more months as markets adjusted to rising rate expectations. USD/CAD bottomed at that time around 1.21.

Since then, currency markets have swung wildly between hawkish and dovish interpretations of economic data and the Bank of Canada’s signals and speeches. The BoC’s latest Monetary Policy Report (MPR) was the perfect expression of this swirl of cautious optimism about the path forward. The report contained good news and bad news; net-net, traders decided to sell the Canadian dollar in what I suspect was disappointment in hearing anything that suggested the BoC is ready to resume rate hikes any time soon. This weakness, overlaid with the recent strength in the U.S. dollar, caused USD/CAD to rebound from the borderline of a breakdown below its 200-day moving average (DMA) to a challenge of its 50DMA.

Source: TradingView.com

It is starting to look like higher lows and higher highs for USD/CAD as the Bank of Canada motivates fresh selling in the Canadian dollar.

The BoC today left its target for its overnight rate at 1¼%. The Bank Rate is 1½% and the deposit rate is 1%. More importantly, the BoC made it clear it is too worried about downside risks to get serious about mapping out a path to higher rates as, for example, the U.S. Federal Reserve has done. This clarity only came after a question during the press conference: a member of the press directly told Governor Stephen S. Poloz and Wilkins that the message in the MPR is not clear. She asked them to sum up the future of monetary policy. Here is Poloz’s response paraphrased (emphasis mine):

Print Friendly, PDF & Email

Share Tweet

Kurt Osterberg

You Might Also Like

  • Finance

    STEPN Sneaker NFTs Sell For $100, Previously Worth $1200

  • Finance

    NFT Prices in Free Fall – 5 NFT Collections to Start Buying Today

  • Finance

    5 NFTs Trending on Twitter Going Cheap to Invest in Now

No Comments

Leave a reply Cancel reply

Top Finance

  • 3 Best Large-Cap Blend Mutual Funds For Enticing Returns 3 Best Large-Cap Blend Mutual Funds For Enticing Returns
  • What is Value Chain Analysis? How to Deliver Value & Gain a Competitive Advantage What is Value Chain Analysis? How to Deliver Value & Gain a Competitive Advantage
  • Hedge Funds In The US Hedge Funds In The US
  • 5 Ridiculously Useful Non-Monetary Reward Examples that Improve Employee Engagement 5 Ridiculously Useful Non-Monetary Reward Examples that Improve Employee Engagement
  • Chart: Amazon’s Dominance In Ecommerce Chart: Amazon’s Dominance In Ecommerce

New Posts

  • STEPN Sneaker NFTs Sell For $100, Previously Worth $1200

    STEPN Sneaker NFTs Sell For $100, Previously Worth $1200

    June 20, 2022
  • NFT Prices in Free Fall – 5 NFT Collections to Start Buying Today

    NFT Prices in Free Fall – 5 NFT Collections to Start Buying Today

    June 20, 2022
  • 5 NFTs Trending on Twitter Going Cheap to Invest in Now

    5 NFTs Trending on Twitter Going Cheap to Invest in Now

    June 20, 2022
  • Bill Gates – ‘NFTs & Crypto Based on Greater Fool Theory’

    Bill Gates – ‘NFTs & Crypto Based on Greater Fool Theory’

    June 20, 2022
  • Actor Seth Green Pays $300,000 to Recover his Stolen BAYC NFT

    Actor Seth Green Pays $300,000 to Recover his Stolen BAYC NFT

    June 20, 2022
  • About
  • Contact Us
  • Privacy & Policy
  • Sitemap
  • Terms of use

Copyright © 2018-2021 NJCEE. All Rights Reserved.