USD/CAD Trades into March High Trendline as BoC Talks Down Economy

By DailyFx | July 16, 2014 AAA

DailyFX.com -

Talking Points

  • Bank of Canada Keeps Headline Rate Unchanged at 1.0%
  • US Dollar Rises vs the Loonie Following the Release
  • Bank of Canada Commentary

The Canadian Dollar extended its losses against its major peers as the Bank of Canada (BoC) decided to leave its key rate unchanged at 1.0 percent. However, it was the BoC’s policy announcement that may have driven the loonie losses.

“Temporary Canada CPI rise isn’t tied to broad economy,” said the Bank of Canada in its policy announcement, “[we] are neutral about the next policy rate move.” They also mentioned that Canada’s economy will not hit capacity until mid-2016. As a result, the BOC has lowered their 2014 growth outlook to 2.2 percent from 2.3 percent, and their 2015 growth outlook to 2.4 percent from 2.5 percent.

Story: Canadian Labor Market Disappoints in June, USD/CAD Rips Higher

Currency Analyst Christopher Vecchio posted the following USD/CAD chart to the DailyFX Real Time News feed after the rate decision, which shows the pair running into trend line resistance from the March highs.

USD/CAD Trades into March High Trendline as BoC Talks Down Economy

USD/CAD Trades into March High Trendline as BoC Talks Down Economy

USD/CAD 5-Minute Chart using FXCM Marketscope 2.0

-- Written by David Maycotte, DailyFX Research Team. Questions, comments or concerns can be sent to dmaycotte@FXCM.com.

Want to trade with proprietary strategies developed by FXCM? Find out how with Mirror Trader.

comments powered by Disqus
Related Forex Analysis
  1. Weekly Trading Forecast: FX Traders Prepare for Heavy Volatility on FOMC, GDP and ...
    Forex News

    Weekly Trading Forecast: FX Traders Prepare for Heavy Volatility on FOMC, GDP and ...

  2. Dollar and Market Confidence Ride on FOMC Decision
    Forex News

    Dollar and Market Confidence Ride on FOMC Decision

  3. Gold Losses to Accelerate on Less Dovish FOMC- Support Break Eyes 1206
    Forex News

    Gold Losses to Accelerate on Less Dovish FOMC- Support Break Eyes 1206

  4. AUD Faces A Potential “Breakout” On US Heavy Event Risk
    Forex News

    AUD Faces A Potential “Breakout” On US Heavy Event Risk

  5. New Zealand Dollar at Risk on Dovish RBNZ, Status-Quo FOMC
    Forex News

    New Zealand Dollar at Risk on Dovish RBNZ, Status-Quo FOMC

Trading Center