Loonie trades lower against Greenback ahead of interest rate announcement
Wednesday 24 April, 2019
Daily Currency UpdateThe Bank of Canada today as expected kept interest rates unchanged at one and three quarters of a percent. The announcement came at 10 am and the loonie fell against its G10 counterparts. Governor Poloz will take questions along side Senior Deputy Governor Wilkins at 11:15 am on the decision-making process and have the opportunity to outline the Central Banks views on the domestic economic outlook for Canada. A dovish tone from the BOC was expected as just recently wage growth and housing prices in Canada have shown declines. The global economy also played a role for the BOC's rate decision as a few weeks ago the IMF lowered its global growth outlook for 2019. Crude oil prices have spiked this year trading today at 66.36 DPB, and yet the Canadian dollar in the short term has found little correlation with the liquid commodity. This correlation in the past has given market participants the ability to coin the loonie with the name "Petro Currency," it is possible this correlation will be seen again after the monetary policy report and market participant adjust currency positions.
Key MoversAs the Bank of Canada released its Monetary Policy Report we find it prudent to highlight a key focus from the central bank: "Global economic growth has slowed by more than the Bank forecast in its January Monetary Policy Report (MPR). Ongoing uncertainty related to trade conflicts has undermined business sentiment and activity, contributing to a synchronous slowdown across many countries. In response, many central banks have signaled a slower pace of monetary policy normalization. Financial conditions and market sentiment have improved as a result, pushing up prices for oil and other commodities."
- USD/CAD: 1.3423 - 1.352 ▲
- EUR/CAD: 1.5036 - 1.5133 ▲
- GBP/CAD: 1.7369 - 1.7508 ▲
- AUD/CAD: 0.9435 - 0.9535 ▼