BOC raises rates – Canadian dollar jumps

The Bank of Canada met expectations and raised rates from 0.50% to 0.75%. In the accompanying statement, the Ottawa based institution says that the current softer inflation is mostly due to temporary factors. This is a hawkish tone implying more hikes.

USD/CAD is falling to a new low of 1.2874. The C$ is strong. Support awaits at 1.2830, followed by 1.2750. Resistance looks far at 1.30.

Governor Stephen Poloz and his colleagues see the output gap closing earlier than before: the end of 2017 against the first half of 2018 in the previous BOC release.

The upgrade of this assessment is due to the recent data. For example, jobs are rising quickly[1].The Canadian economy has already absorbed the fall in oil prices. The BOC sees the economy as robust and highlights household spending.

The updated forecasts see Q2 growth at 3%, 2% in Q3 and the whole of 2017 is now seen at 2.8% against 2.6% previously.

BOC Background

The majority of analysts expected the Bank of Canada to raise rates from 0.50% to 0.75%, but this was not 100% certain. Some expected no hike today but a heavy hint for a hike in October.

USD/CAD traded around 1.2920 ahead of the release.

Previews:

Get the 5 most predictable currency pairs[2]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/fgXlcndR7WE/

from Online Forex Trading Resource
View thesource article here

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s