Loonie feeling the pinch as USD soars
Wednesday 8 March, 2023
Daily Currency UpdateAll eyes today will be on the Bank of Canada’s (BoC) interest rate decision. The central bank is expected to hold rates steady at 4.5% after announcing a “conditional pause” at the January meeting, as they allow the economy to digest the previous 8 hikes. Markets will be listening closely to commentary from BoC Governor, Tiff Macklem, to see if inflation is still slowing at an acceptable pace and for guidance on future rate actions. The USD soared yesterday as Federal Reserve Chairman, Jerome Powell, began his congressional testimony saying US interest rates are likely to lead higher than previously expected. This is sending the USD/CAD to 4 month high and the highest levels of 2023. Canada’s trade surplus widened, with the Balance of Trade print coming in at 1.92 billion versus the forecasted -160 million.
Key MoversOil also felt the effect of Powell’s testimony, with the largest 1-day price drop in the last 2 months. The goal of higher interest rates is to ultimately slow growth and combat inflation, potentially lowering demand for oil.
- EUR/CAD: 1.4488 - 1.4519 ▼
- GBP/CAD: 1.6261 - 1.6346 ▼
- AUD/CAD: 0.9049 - 0.9094 ▼
- USD/CAD: 1.3691 - 1.3771 ▲