- Bank of Canada raises rates as expected, expects to hold now.
- The Loonie weakens after the announcement.
- USD/CAD jumps but then pulls back towards 1.3400.
The USD/CAD jumped more than 50 points after the Bank of Canada decision and rose to 1.3425, reaching the highest level since last Friday.
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As expected, the Bank of Canada raised the official interest rate by 25 basis points to 4.5%. In the statement, central banks mentioned that they are likely to keep rates at this level while they assess the impact of recent policy measures.
Following the announcement, the Loonie weakened overall. The USD/CAD pair rose from 1.3365 to 1.3426. Then he backed off. Loonie crosses remain volatile as market participants digest the decision.
The BoC signals that its intention is to remain on hold, which is not a surprise to the markets. Analysts believed that the rise from the January meeting could be the last, given the current economic outlook.
USD/CAD fell back below 1.3400 after a few minutes. More volatility is expected. The pair needs to stay well above 1.3400 to keep the doors open for more gains in the coming hours. The next resistance is at 1.3440. Key support is the 1.3340 zone and a break down could trigger an acceleration to the downside towards 1.3300.
technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
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