Canadian Dollar Mixed After BoC Surprise Rate Cut
March 27 2020 - 6:51AM
RTTF2
The Canadian dollar showed mixed trading against its major
counterparts in the European session on Friday, after the Bank of
Canada reduced its benchmark rate unexpectedly to cushion the
economic shocks from the COVID-19 pandemic.
The BoC lowered its target for the overnight rate by 50 basis
points to 0.25 percent, the bank said in a statement.
The Governing Council is willing to take further action as
required to support the Canadian economy and financial system and
to keep inflation on target, it added.
The central bank launched two new programs.
The Commercial Paper Purchase Program will help to alleviate
strains in short-term funding markets and thereby preserve a key
source of funding for businesses.
The Bank will begin acquiring Government of Canada securities
worth minimum C$5 billion per week.
The loonie fell to 1.4154 against the greenback, from a 10-day
high of 1.3989 set at 1:45 am ET. The next possible support for the
loonie is seen around the 1.47 level.
The CAD/JPY pair hit a 2-day low of 76.81. At yesterday's close,
the pair was valued at 78.14. The loonie is seen finding support
around the 75.00 level.
Data from the Ministry of Communications and Internal Affairs
showed that overall consumer prices in the Tokyo region of Japan
were up 0.4 percent on year in March.
That exceeded expectations for an increase of 0.3 percent and
was unchanged from the February reading.
The loonie rose to 1.5442 against the euro, reversing from a low
of 1.5536 seen in the Asian session. Further rally may take the
loonie to a resistance around the 1.50 area.
The loonie bounced off to 0.8504 against the aussie, from a
2-day low of 0.8581 logged in the previous session. The loonie is
likely to find resistance around the 0.81 mark.
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