Bank of Canada holds interest rates for the sixth month in a row
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Daily Currency Update
The Bank of Canada (BoC) held rates steady this morning at 5% for the sixth consecutive meeting. BoC Governor Tiff Macklem noted, “What do we need to see to be convinced it’s time to cut? The short answer is we are starting to see what we need to see, but we need to see it for longer to be confident that progress toward price stability will be sustained.” The overall FX market has viewed this positively for the CAD as it was up this morning against some major currencies, while the USD/CAD pair saw its highest levels so far this year to trade near 1.3671.Key Movers
The US Dollar Index (DXY) was up against most major currencies this morning amid higher-than-expected Consumer Price Index (CPI) data. Most notably, the USD was up against the CAD by more than half a percent this morning, hitting a new 2024 high. The US reported CPI levels at 3.5% year-over-year, versus the expected 3.4%, and above last month’s 3.1%. These inflated levels provided further evidence that inflation in the US has remained sticky and could lead to a more hawkish Federal Reserve approach than previously expected.In Eurozone news, Italy reported retail sales up by 0.1% month-over-month. Overall, there was very little growth in this space and data came out mostly in line with previous readings. The EUR/USD dipped today to trade near 1.0761%.
The Reserve Bank of New Zealand (RBNZ) kept interest rates flat at 5.5%, a 15 year high, during their monetary policy meeting yesterday. This hold was in line with market expectations. The latest inflation print from the RBNZ was 4.7%, still far from their target of 2%. The NZD initially jumped after the interest rate news and the general hawkish tone of the RBNZ but has since cooled off.
Expected Ranges
- EUR/CAD: 1.46685 - 1.47397 ▼
- GBP/CAD: 1.71446 - 1.72352 ▼
- AUD/CAD: 0.89026 - 0.89984 ▼
- USD/CAD: 1.35560 - 1.36780 ▲