Canadian Dollar Falls Sharply As BoC Retains Rate; Removes Rate Hike Bias
April 24 2019 - 6:56AM
RTTF2
The Canadian dollar drifted lower against its key counterparts
in the New York session on Wednesday, after the Bank of Canada kept
its benchmark rate unchanged and eliminated its wording suggesting
the hint for rate hikes in future from the statement.
The BoC maintained its benchmark rate at 1.75 percent, in line
with expectations.
The economic growth during the first half of 2019 is now
estimated to be slower than anticipated in January, the bank
said.
Inflation is forecast to dip in the third quarter, due to the
dynamics of gasoline prices, before returning to about 2 percent by
year end.
"Given all these developments, the Governing Council judges that
an accommodative policy interest rate continues to be warranted,"
the bank noted.
This was in contrast with the March statement which suggested
"about the timing of future rate increases."
The currency was trading higher against its major counterparts
in the European session.
The loonie fell to 82.68 versus the yen, its lowest since March
29. This follows a high of 83.34 touched at 5:00 pm ET. The loonie
is seen finding support around the 80.5 level.
The loonie that closed yesterday's trading at 1.3421 against the
greenback depreciated to a 3-1/2-month low of 1.3521. The next
possible support for the loonie is seen around the 1.36 level.
The loonie declined to an 8-day low of 1.5129 against the euro,
compared to 1.5070 hit late New York Tuesday. If the loonie drops
further, 1.525 is possibly seen as its next support level.
Survey data from the Ifo Institute showed that Germany's
business confidence unexpectedly weakened in April to its lowest
level in three years.
The Ifo business climate indicator dropped to 99.2 from an
upwardly revised 99.7 in March. Economists had expected the index
to climb to 99.9 from March's original 99.6.
The loonie pulled back to 0.9496 against the aussie, from a
3-week high of 0.9444 hit at 9:45 am ET. Next key support for the
loonie is likely seen around the 0.96 level.
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