The Canadian dollar is stable on Thursday. In the European session, 1,4379 is quoted, 0.06% more in the day.
Bank of Canada reduces rates to 2.75%
There was no surprise of the, which reduced the rates in a quarter quarter, which brought the cash rate to 2.75% and gave the Canadian dollar impulse. The BOC has reduced rates in seven consecutive meetings and has cut 225 basic points since last June.
Behind the modest cutting quarter cuts, there is a growing alarm in the Bank of Canada for the commercial dispute with the United States. The rate statement said that “generalized uncertainty created by the threats of American tariffs that continuously changes” was weighing consumer plans and business plans to spend. The statement also warned that “monetary policy cannot compensate for the impacts of a commercial war.” Governor Macklem echoed these concerns at the monitoring press conference, qualifying the commercial conflict as a “new crisis” and warning that the economic impact in Canada could be “severe.”
The United States inflation falls more than expected
Surprised by the positive side in February. The main inflation decreased to 0.2% m/m from 0.5% and below the 0.3% market estimation. Annually, the main inflation fell to 2.8% from 3% and below the market estimation of 2.9%.
It was a similar story for 0.2%of 0.4%, below the market estimation of 0.3%. Annually, the central rate fell to 3.1%of 3.3%, less than the estimate of the market of 3.2%. This marked the lowest level since April 2021 and the decrease is significant since central inflation has been persistent and well above the 2%Federal Reserve objective.
The remains in a way of waiting and seeing with respect to the commercial policy of the United States. The Fed is practically sure to stay out of the next week. The probability of a rate cut in May has fallen to 30%, below 46% before the inflation report.
USD/Technical CAD
- Proven USD/CAD resistance 1,4404 before. Above, there is resistance to 1,4454
- 1,4322 and 1,4272 are the following support levels
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