• Sun. Jun 23rd, 2024

The Canadian Dollar Falls Again After the Bank of Canada Keeps Rates at 5%, Which Slows Down the Loonie’s Progress

Leon Kramer

ByLeon Kramer

Dec 9, 2023

start trading

  • On Wednesday, the Canadian Dollar experienced another decline, surrendering more territory.
  • The Bank of Canada decided to maintain interest rates at 5%, just as the financial markets had anticipated.
  • The Canadian dollar relinquished its gains earlier in the day against the US dollar and continues to be in a downward trend for the week.

On Wednesday, the Canadian Dollar (CAD) experienced slight improvements but faced difficulties in making progress following the Bank of Canada’s (BoC) decision to maintain its benchmark interest rate at 5%, which was what the market anticipated. The Canadian dollar experienced a short-lived increase against most significant currency groups before returning to a varied assortment.

The Canadian Dollar has relinquished all of the gains it made during the day and is currently experiencing a decline of three-quarters of a percent compared to the US Dollar (USD) for the week.

The Bank of Canada (BoC) decided to keep rates unchanged for the third consecutive gathering, maintaining enough room for a more aggressive stance in case there is a rise in inflation risks.

After the Bank of Canada Maintained Its Rate of Interest, the Canadian Dollar Continues to Strain for More Gains

  • The Canadian Dollar is currently experiencing movement about the US Dollar. It aims to regain lost value after being pushed down by the Greenback earlier in the week leading up to the Bank of Canada’s interest rate announcement.
  • The Bank of Canada decided to maintain its benchmark rate at 5%, which was in line with market expectations.
  • The Central Bank of Canada also toned down its aggressive language, reducing statements regarding the dangers of inflation and maintaining its attention on reducing price pressures.
  • The Bank of Canada left a few statements that were more inclined towards a hawkish stance, restating that interest rates could increase further in the event of a resurgence in inflationary forces.
  • The statement from the Bank of Canada highlights the desire of the Governing Council to witness additional and consistent alleviation in the underlying inflation rate. They also emphasize their ongoing attention to maintaining equilibrium between the demand and supply dynamics in the economy, as well as monitoring inflation expectations, wage increases, and the pricing strategies of businesses.
  • The figures for US ADP Employment Change fell short of expectations on Wednesday, causing a bit of unease in currency pairs tied to the USD.
  • The November US ADP Employment Change revealed an increase of 103K fresh job opportunities in the US economy. This figure was slightly lower than the predicted rise to 130K and decreased from October’s 106K (revised down from 113K).
  • The noteworthy data released on Thursday before the market’s transition into Friday’s US Nonfarm Payrolls (NFP) will be the US Initial Jobless Claims for the week of November 24.

How Much the Canadian Dollar Is Worth This Week

The table below displays the percentage fluctuation of the Canadian Dollar (CAD) for various prominent currencies this week. The Canadian Dollar experienced a significant decline in value compared to the US Dollar.

Start Trading
Start Trading

Technical Analysis

On Wednesday, the Canadian Dollar (CAD) experienced slight gains, but it did lose some value compared to the Aussie (AUD) and the Kiwi (NZD) during the middle of the week. However, it later declined further during the American market session. The Canadian Dollar (CAD) experienced a slight increase of approximately 0.1% compared to the US Dollar (USD). However, it later decreased and reached new lows for the day, causing the USD/CAD exchange rate to approach the 1.3600 level.

At the beginning of the week, the USD/CAD progressed from its initial bids of around 1.3495 to the 200-hour Simple Moving Average (SMA), slightly below the 1.3600 level. 

This week, the Canadian Dollar has experienced gains against all currencies except for the safe havens. Despite Loonie’s attempt on Wednesday, the USD/CAD remains approximately 0.5% lower than the opening bids from Monday.

start trading

Leon Kramer

Leon Kramer

Leon Kramer, a renowned financial author, enlightens Main Forex News readers with his deep understanding of currency markets. His years in global finance, combined with an intuitive grasp of trends, delivers insightful, up-to-the-minute foreign exchange analysis.

Leave a Reply

Your email address will not be published. Required fields are marked *