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CAD little changed after Bank of Canada rate decision

Wednesday 14 July, 2021

Daily Currency Update

CAD - Canadian DollarDemand for the Canadian dollar was little changed after The Bank of Canada once again tapered its bond-buying program in a bid to rein in emergency levels of pandemic stimulus. USDCAD was up 0.04%, trading at 1.2516 at the time of writing. The central bank also forecasted higher inflation while holding interest rates at the same level. Policymakers indicated they don’t expect any hikes before the second half of 2022. This was largely in line with market expectations.

Key Movers

Sterling climbed against the dollar after figures showed UK inflation rose more than expected to 2.5%, its highest level in almost three years. GBPUSD rose 0.40% to trade at 1.3867 at the time of writing. The euro also climbed against the dollar following Fed chair Powell’s testimony. According to some analysts, short-term movement for the euro largely depends on where the US dollar goes as market participants continue to adjust to Fed comments and higher inflation. EURUSD was up 0.38%, trading at 1.1824 at the time of writing.The US dollar retreated after US Federal Reserve chair Jerome Powell stated that the central bank expects inflation to remain elevated in the coming months. He added that the economy is still “a ways off” from a point where the central bank would start easing support. The US Dollar Index was down 0.39%, trading at 92.39 at the time of writing.

Expected Ranges

  • EUR/CAD: 1.472 - 1.4793 ▲
  • GBP/CAD: 1.727 - 1.7367 ▲
  • AUD/CAD: 0.9307 - 0.9352 ▲
  • USD/CAD: 1.2453 - 1.2524 ▲