Home Forex News Canadian dollar adds to gains as markets bet Bank of Canada cuts rates before Fed

Canadian dollar adds to gains as markets bet Bank of Canada cuts rates before Fed


Canadian dollar adds to gains as markets bet Bank of Canada cuts rates before Fed By Investing.com

Breaking News


AuthorKetki SaxenaCurrencies

Published Mar 07, 2024 06:18PM ET

© Reuters.

Investing.com – The Canadian Dollar added to gains vs. its U.S. counterpart today, with the loonie supported by broad-risk on sentiment, and as markets continued to digest yesterday’s more-hawkish than expected rate-hold from the Bank of Canada.

Meanwhile, the greenback continued to retreat following a reiteration of coming rate cuts this year from Fed Chair Jerome Powell as he continued his testimony to the Senate today. 

Analysts at Commerzbank (ETR:CBKG) note that the BoC’s more hawkish tone relative to Powell’s comments indicate that the BoC is likely to move in lockstep with – or later than the Fed, implying further upside for the loonie in coming months.  

Commerzbank analysts note, “Some market participants were expecting a more dovish tone in the statement. The fact that the BoC did not deliver reinforces our view that the BoC is unlikely to cut rates until after the Fed.”

“We therefore continue to see upside potential for the CAD in the coming months.”

Following the BoC’s rate decision yesterday, markets now expect rate cuts in July rather than in June, as had been priced in before the Canadian central bank’s interest rate announcement. 

Jerome Powell’s testimony meanwhile has served to strengthen bets of a rate cut from the Fed in June.

Further impetus to the pair will come from tomorrow’s Canadian employment data, and U.S. Nonfarm Payrolls for February, which markets will be watching to gain further possible insights on the rate path forward for the Canadian and U.S. central banks. 

On a technical level for the pair, analysts at FXStreet note that “Thursday’s decline drags the USD/CAD pair back into the 200-day Simple Moving Average (SMA) at 1.3477, and the immediate technical floor is priced in at the last meaningful swing low toward 1.3350.”

Canadian dollar adds to gains as markets bet Bank of Canada cuts rates before Fed

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning
Do not sell my personal information

© 2007-2024 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Related News