USD/CAD soared to fresh 6-year highs after the Bank of Canada decided to cut the main rate by 25 bps to 0.75%, the first reduction since April 2009, in a move that caught markets off guard.
USD/CAD rallied more than 200 pips and reached its highest level since April 2009 at 1.2275 as the knee-jerk reaction. At time of writing, the pair is trading at the 1.2270 zone, up 1.32% on the day.
The BoC cited this decision as a response to the recent sharp drop in oil prices, which will be negative for growth and underlying inflation in Canada. Meanwhile, the BOC lowered its growth forecast for 2015 to 2.1% from 2.4%, and said it CPI to fall to 0.3% in the Q2.
USD/CAD rallied more than 200 pips and reached its highest level since April 2009 at 1.2275 as the knee-jerk reaction. At time of writing, the pair is trading at the 1.2270 zone, up 1.32% on the day.
The BoC cited this decision as a response to the recent sharp drop in oil prices, which will be negative for growth and underlying inflation in Canada. Meanwhile, the BOC lowered its growth forecast for 2015 to 2.1% from 2.4%, and said it CPI to fall to 0.3% in the Q2.
