CANADIAN DOLLAR OUTLOOK: USD/CAD, EUR/CAD, CAD/JPY PRICES REACT TO BANK OF CANADA DECISIONFinancial institution of Canada (BOC) s
CANADIAN DOLLAR OUTLOOK: USD/CAD, EUR/CAD, CAD/JPY PRICES REACT TO BANK OF CANADA DECISION
- Financial institution of Canada (BOC) simply launched its newest financial coverage assertion and left its goal rate of interest unchanged at 0.25%
- USD/CAD and EUR/CAD costs jumped and spot CAD/JPY pivoted decrease instantly after the BOC determination crossed the wires
- Canadian Greenback (CAD) is coming below strain as FX merchants digest dovish central financial institution outlook underpinned by sluggish inflation expectations post-COVID
The Canadian Greenback is edging decrease within the wake of the BOC assertion that simply crossed the wires. Financial institution of Canada officers agreed to depart the coverage rate of interest unchanged at 0.25% as anticipated. The central financial institution additionally reiterated that it’s going to proceed its QE program operating at C$5-billion purchases of Canada authorities bonds per week.
Study Extra – How Central Banks Affect the Foreign exchange Market
USD/CAD PRICE CHART: 1-MINUTE TIME FRAME (15 JULY 2020 INTRADAY)
USD/CAD worth motion pressed larger within the wake of the Financial institution of Canada determination. The Canadian Greenback stays in optimistic territory on the day in opposition to its USD peer, nevertheless, because the US Greenback trades broadly alongside different safe-haven property.
| Change in | Longs | Shorts | OI |
| Day by day | -8% | 2% | -4% |
| Weekly | 4% | -5% | -1% |
Canadian Greenback weak spot following the BOC assertion is probably going defined by dovish verbiage concerning rate of interest and inflation outlook. The Financial institution of Canada governing council famous they plan on holding the in a single day money fee at its present degree till financial slack is absorbed and inflation measures get well to focus on.
EUR/CAD PRICE CHART: 1-MINUTE TIME FRAME (15 JULY 2020 INTRADAY)
EUR/CAD worth motion whipsawed within the wake of the most recent BOC assertion. The Euro aimed larger initially in opposition to the Loonie, however the pop was short-lived with spot EUR/CAD since pivoting again decrease to commerce at contemporary session lows. Maybe a rejection of technical resistance round 1.5500-handle, which is underpinned by Could’s swing excessive, may partly clarify the stretch of EUR/CAD weak spot.
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Moreover, the European Central Financial institution is on faucet to launch its personal financial coverage replace on Thursday, 16 July at 11:45 GMT and leaves the Euro in danger forward of this doubtlessly market-moving occasion.
CAD/JPY PRICE CHART: 1-MINUTE TIME FRAME (15 JULY 2020 INTRADAY)
Spot CAD/JPY gyrated following the Financial institution of Canada determination. The Canadian Greenback dipped into damaging territory in opposition to the interest-rate delicate Japanese Yen, however CAD/JPY costs have since ripped again larger and commerce flat on the day.
Additionally noteworthy, the Canadian Greenback is perhaps dealing with headwinds from crude oil worth motion because of the sturdy direct relationshipsometimes held between the 2 property. Oil is at present digesting latest commentary from Saudi Arabia and Russia conform to unwind latest manufacturing cuts subsequent month.
Learn Extra – USD/CAD Eyes US Greenback Weak point and Financial institution of Canada Coverage Resolution
— Written by Wealthy Dvorak, Analyst for DailyFX.com
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