Canadian Dollar Jumps as BoC Statement Doesn’t Show Dovishness

The Canadian dollar jumped following the monetary policy meeting of the Bank of Canada as the central bank’s statement turned out to be not as dovish as market participants were expecting.

The BoC left its main interest rate at 0.5% as was widely expected. Markets also expected a dovish statement, especially after inflation missed economists’ projections. Yet instead, the central bank voiced optimism about both global and domestic economies, stating about Canada’s economy:

“The Canadian economy’s adjustment to lower oil prices is largely complete and recent economic data have been encouraging, including indicators of business investment. Consumer spending and the housing sector continue to be robust on the back of an improving labour market, and these are becoming more broadly based across regions”.

The optimistic remarks helped the Canadian currency to ignore oil prices, which fell as traders were nervous ahead of yesterday’s meeting of the Organization of Petroleum Exporting Countries.

USD/CAD dropped on Wednesday from 1.3512 to 1.3408. The USD/CAD is trading slightly higher on Thursday to correct yesterday’s move at 1.3435, up 0.22%.

This post was originally published by EarnForex