Canadian Dollar Drops As BoC Cuts Interest Rates
June 05 2024 - 8:42AM
RTTF2
The Canadian dollar declined against its major counterparts in
the New York session on Wednesday, as the Bank of Canada lowered
interest rates by 25 basis points.
The Bank of Canada reduced its target for the overnight rate to
4.75 percent, with the bank rate at 5.0 percent and the deposit
rate at 4.75 percent.
The widely expected decision comes as recent data has increased
the Canadian central bank's confidence that inflation will continue
to move towards its 2 percent target.
The bank's accompanying statement noted its preferred measures
of core inflation has slowed, while three-month measures suggest
continued downward momentum.
Nonetheless, the Bank of Canada noted risks to the inflation
outlook remain and said its Governing Council is closely watching
the evolution of core inflation.
The Governing Council remains particularly focused on the
balance between demand and supply in the economy, inflation
expectations, wage growth, and corporate pricing behavior, the bank
said.
The loonie reached as low as 0.9115 against the aussie. The
currency is likely to face support around the 0.92 region, if it
falls again.
The loonie fell to near a 2-week low of 1.3741 against the
greenback and more than a 6-month low of 1.4929 against the euro,
off its early highs of 1.3665 and 1.4856, respectively. The
currency may locate support around 1.39 against the greenback and
1.50 against the euro.
The loonie eased against the yen and was trading at 113.93. The
currency is seen finding support around the 108.00 level.
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