USDCAD Intra-Day Fundamentals - Bank of Canada Interest Rates and 324 Pips Price Movement
- past data is 1.00%
- forecast data is 1.00%
- actual data is 0.75% according to the latest press release
if actual > forecast (or actual data) = good for currency (for CAD in our case)
[CAD - Overnight Rate] = PInterest rate at which major financial institutions borrow and lend overnight funds between themselves.
Short term interest rates are the paramount factor in currency valuation
- traders look at most other indicators merely to predict how rates
will change in the future
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The Bank of Canada today announced that it
is lowering its target for the overnight rate by one-quarter of one
percentage point to 3/4 per cent. The Bank Rate is correspondingly 1 per
cent and the deposit rate is 1/2 per cent. This decision is in response
to the recent sharp drop in oil prices, which will be negative for
growth and underlying inflation in Canada. Inflation has remained close to the 2 per cent target in recent
quarters. Core inflation has been temporarily boosted by sector-specific
factors and the pass-through effects of the lower Canadian dollar,
which are offsetting disinflationary pressures from slack in the economy
and competition in the retail sector. Total CPI inflation is starting
to reflect the fall in oil prices. Oil’s sharp decline in the past six months is expected to boost
global economic growth, especially in the United States, while widening
the divergences among economies. Persistent headwinds from deleveraging
and lingering uncertainty will influence the extent to which some
oil-importing countries benefit from lower prices. The Bank’s base-case
projection assumes oil prices around US$60 per barrel. Prices are
currently lower but our belief is that prices over the medium term are
likely to be higher.
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USDCAD M5: 324 pips price movement by CAD - Overnight Rate news event
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