HiFX: Foreign Exchange Specialists

• Headlines

June 10, 2008

In a surprise decision the Bank of Canada has left its overnight rate on hold at 3.00%, marking the end of a five month cutting cycle.  The accompanying statement which was due to steal the limelight highlighted that “the bank now judges the current stance on monetary policy is appropriately accommodative to bring aggregate demand and supply into balance to achieve the 2% inflation target.”  In anticipation of the expected 25bps rate cut form the BoC the Canadian Dollar had weakened against the US Dollar to trade at levels nearer to 1.0300. However, immediately following the decision the Canadian Dollar strengthened by 1% resulting in USD/CAD trading back down towards 1.0200.