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USDCAD Lifts on Emergency Bank of Canada Rate Cut

USDCAD Lifts on Emergency Bank of Canada Rate Cut

Thomas Westwater, Analyst

BOC Rate Cut Talking Points:

  • The Bank of Canada cut its overnight rate target to 0.75 percent from 1.25 percent
  • USDCAD pushed higher as news of the cut crossed the wires
  • BOC’s Poloz states “Lower rates to support consumer confidence”

The Bank of Canada cut its overnight interest rate by 50 basis points Friday afternoon in an emergency rate cut to respond to the fallout from COVID-19. Bank of Canada’s Governor Stephen Poloz stated this cut will help consumer confidence. The emergency cut from the BOC follows last weeks emergency rate cut from the Federal Reserve. USDCAD lifted above 13970.0 as the news crossed the wires.

USDCAD (1-Min Chart)

USDCAD Rate cut chart BOC

Source: IG

Along with the emergency rate cut, Poloz said that the BOC will roll out a new banker purchase facility along with lowering the bank stability buffer by 125 basis points. Willingness from central bankers to combat fallout from the novel coronavirus is now palpable, but many policy makers agree that an appropriate fiscal response will also be required to support economic strength.

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

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