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The Bank of Canada is the last to join the dovish tone of central banks around the world

CAD - Canadian Dollar

The Bank of Canada left its benchmark overnight rate at 1.75 percent for the fourth time. It moved away from raising interest rates as the economy confronts a slowdown, bringing its policy in line with the Fed and other major industrial central banks. Poloz had been unenthusiastic about abandoning higher rates as a next step, which likely sets the BoC apart from other central banks.

In the statement, BoC officials noted the following:
"Governing Council judges that an accommodative policy interest rate continues to be warranted ... We will continue to evaluate the appropriate degree of monetary policy accommodation as new data arrive. "

With this, policymakers now expect interest rates to remain on hold as the economy struggles with some headwinds that the BoC believes brought Canada’s economy close to a recession over the past six months when GDP grew by just 0.1 percent in the fourth quarter.

The USD/CAD pair trades 0.08 percent higher at 1.3497 at the time of this writing (weaker Loonie).

Key Movers

The Bank of Japan said the economy would only expand 0.8 percent versus its prediction of 0.9 percent. Furthermore, despite that it has been almost nine years since Governor Haruhiko Kuroda launched its radical program to reflate prices, the BoJ now projects that it won't accomplish its 2 percent inflation target at least through March 2022. At the time of this writing, the Japanese Yen rallies versus the major currencies. The USD/JPY falls 0.4 percent (stronger Yen), and the CAD/JPY falls 1.4 percent (stronger Yen).

Expected Ranges

USD/CAD: 1.3460 - 1.3505 ▼

EUR/CAD: 1.5002 - 1.5060 ▼

GBP/CAD: 1.7377 - 1.7466 ▲

AUD/CAD: 0.9428 - 0.9499 ▼

NZD/CAD: 0.8867 - 0.8962 ▲