June 05, 2024 13:56 GMT
BOC: USD/CAD Rallies to Top-End of Downtrend Channel on Dovish BoC
BOC
USD/CAD spikes on the back of the BoC decision, showing above the 1.37 handle for the first time this week.
The BoC statement and decision are toward the dovish end of expectations given some were looking for a delay to easing this month, and the statement included a reference to potential future cuts. These elements lean dovish, with focus shifting to the upcoming press conference in just over 30 minutes.
- Looking into the statement more closely (link here: https://www.bankofcanada.ca/2024/06/fad-press-release-2024-06-05/ )
- Bank note that growth was weaker than forecast in the last MPR: "first-quarter GDP growth was slower than forecast in the MPR. Weaker inventory investment dampened activity."
- On wage pressures: "remain but look to be moderating gradually. Overall, recent data suggest the economy is still operating in excess supply."
- On policy specifically - "Governing Council agreed that monetary policy no longer needs to be as restrictive", "Recent data has increased our confidence that inflation will continue to move towards the 2% target"
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