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Canadian Dollar Tumbles as Poloz Predicts Weaker Growth, Inflation

Canadian Dollar Tumbles as Poloz Predicts Weaker Growth, Inflation

Benjamin Spier, Technical Strategist

Talking Points:

  • BoC’s Poloz predicts softer long-term inflation and growth
  • BoC previously said next rate move depends on data
  • Canadian Dollar declined thirty pips against USD

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Bank of Canada Governor Poloz predicted softer long-term inflation and growth, sending the Canadian Dollar lower in Forex markets. Poloz said that growth in the first quarter will be weak mostly because of weather, and he said that February CPI will appear because of a strong base for year over year comparisons.

The Bank of Canada announced earlier this month that the next rate change direction depends on new data, and the BoC said that the downside risks to inflation remain important. Therefore, weaker than expected inflation or growth could push the Canadian central bank in the direction of a rate cut.

USD/CAD 1-Minute: March 18, 2014

Canadian-Dollar-Tumbles-as-Poloz-Predicts-Weaker-Growth-Inflation_body_Picture_1.png, Canadian Dollar Tumbles as Poloz Predicts Weaker Growth, Inflation

The Canadian Dollar declined over thirty pips against the US Dollar following the comments, and USD/CAD may next see resistance by the 3-week high at 1.1159. The USD/CAD rally may play into a longer intra-day bounce towards 1.1100, which was proposed earlier today by David de Ferranti.

Chart created by Benjamin Spier using Marketscope 2.0. Add DailyFX Support/Resistance to your charts at FXCM Apps.

-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to instructor@dailyfx.com .

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

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