USD/CAD Erratic Price Action After Bank of Canada Emergency Rate Cut
USD/CAD Price, News and Analysis:
- USD/CAD swings after BoC cuts rates by 50 basis points.
- Central Bank buying government bonds and commercial paper.
Bank of Canada Lowers Overnight Target Rate to 0.25% From 0.75%
The Bank of Canada cut 50 basis points off its overnight rate today, leaving the rate at its effective lower bound of 0.25%, due to debilitating effects of the coronavirus and the sharp decline in the price of oil. The BoC also announced two new programs, buying commercial paper and government securities in the secondary market, with purchases set at a minimum of CAD5 billion a week across the yield curve.
In a statement later, BoC governor Stephen Poloz said that the new bond buying programs will be kept going ‘until it’s clear the economic recovery is well underway’ and added that the central bank stands ready to ‘take further action as required to support the Canadian economy and its financial system to keep inflation on target’.
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USD/CAD Five Minute Price Chart (March 27, 2020)
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