News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • GBP/USD has flattened overnight after its strongest rally in a month on Thursday. The British currency has been under pressure recently as an energy crisis has caused a number of gas providers to go bankrupt. Get your market update from @HathornSabin here:
  • Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. Learn about the shooting star candlestick and how to trade it here:
  • Gold could suffer further near-term losses due to rising U.S. Treasury yields and a weak technical picture for price action. Get your weekly gold forecast from @DColmanFX here:
  • Gold has been trending lower after failing to clear resistance in the $1835 area earlier this month. Get your $XAUUSD market update from @DColmanFX here:
  • Key break here in the 10-year #Treasury yield as it rises to the highest since late June Took out 1.4230 resistance, and the 100-day SMA Eyes now on the 38.2% Fib extension at 1.4775 Also potential falling resistance from March
  • The move in rates after this week’s FOMC has continued and the 10 year yield has pushed up to a fresh two-month-high. Get your market update from @JStanleyFX here:
  • S&P 500 contending with its proverbial ‘line in the sand’ as bulls and bears battle for directional control. How we close/trade around the 50-day moving average could serve as a noteworthy bellwether for risk trends headed into next week. I remain cautious below ~4,480. $SPX $ES
  • USD/JPY trades to a fresh monthly (110.57) amid the pickup in longer-dated US Treasury yields, and the exchange rate may stage a larger advance over the coming days. Get your market update from @DavidJSong here:
  • US yields continue to climb, with the 10-year Treasury yield trading above 1.45% $ZN $ZB
  • $USDJPY bull thesis appears quite constructive. Technicals show topside breakout above trend resistance following a period of consolidation. Bond yields providing the fundamental catalyst. Eyes on Aug/YTD highs. A broad-based deterioration in market sentiment poses downside risk.
Forex News: Canadian Dollar Rallies After Hawkish BoC

Forex News: Canadian Dollar Rallies After Hawkish BoC

Christopher Vecchio, CFA, Senior Strategist

THE TAKEAWAY: CAD Bank of Canada Rate Decision > Hawkish Policy Statement > USD/CAD BEARISH

The Bank of Canada Rate Decision went off without much of a bang, with the world’s most stable major central bank keeping its key rate on hold at 1.00%, its Bank Rate at 1.25%, and its deposit rate at 0.75%. Nevertheless, the BoC’s statement accompanying the decision was riddled with hawkish commentary, given its bias for commending the Canadian economy and blaming exogenous actors for most economic weakness.

Presented without commentary is the statement itemized by topic:

On the global economy:

  • The economic expansion in the United States is progressing at a gradual pace and is being held back by uncertainty related to the fiscal cliff.
  • Europe remains in recession.
  • Chinese growth appears to be stabilizing.
  • Global financial conditions remain stimulative, though vulnerable to major shocks from the U.S. or Europe.

On the Canadian economy:

  • Economic activity in the third quarter was weak, owing in part to transitory disruptions in the energy sector.
  • The pace of economic growth is expected to pick up through 2013. The expansion is expected to be driven mainly by growth in consumption and business investment, reflecting very stimulative domestic financial conditions.
  • Housing activity is beginning to decline from historically high levels. While the household debt burden continues to rise, growth in household credit has slowed. It is too early, however, to determine whether the moderation in housing activity and credit growth will be sustained.
  • Canadian exports are expected to pick up gradually but continue to be restrained by weak foreign demand and ongoing competitiveness challenges. These challenges include the persistent strength of the Canadian dollar, which is being influenced by safe haven flows and spillovers from global monetary policy.

On inflation:

  • Both total and core inflation are expected to increase and return to 2 per cent over the course of the next 12 months as the economy gradually absorbs the current small degree of slack, the growth of labour compensation remains moderate and inflation expectations stay well-anchored.

The BoC concluded, that: “Over time, some modest withdrawal of monetary policy stimulus will likely be required, consistent with achieving the 2 per cent inflation target. The timing and degree of any such withdrawal will be weighed carefully against global and domestic developments, including the evolution of imbalances in the household sector.” This statement proved to be hawkish enough to spur Canadian Dollar strength.

USD/CAD 1-minute Chart: December 4, 2012

Forex_News_Canadian_Dollar_Rallies_After_Hawkish_BoC_forex_news_currency_trading_body_Picture_1.png, Forex News: Canadian Dollar Rallies After Hawkish BoC

Charts Created using Marketscope – Prepared by Christopher Vecchio

Following the release, the USD/CAD fell from 0.9948 to as low as 0.9920, nearly without pause. Still, the drop was only modest, as risk-appetite trends were failing to make meaningful headway at the time the BoC Rate Decision was announced.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.