USD/CAD: BoC cuts benchmark interest rate, announces QE


USDCAD Movement

For the 24 hours to 23:00 GMT, the USD rose 7.28% against the CAD and closed at 1.3991 on Friday.

The Canadian dollar declined against the US dollar, after Canada’s central bank cut its interest rate and launched a quantitative easing (QE) programme.

The Bank of Canada (BoC), in its interest rate decision, slashed its key interest rate by 50bps to 0.25%, in an effort to provide support to the Canadian financial system and the economy during the COVID-19 pandemic. Additionally, the central bank announced that it would buy C$5 billion of government bonds of varying maturities each week to support the real economy.

In the Asian session, at GMT0300, the pair is trading at 1.4050, with the USD trading 0.42% higher against the CAD from Friday’s close.

The pair is expected to find support at 1.3930, and a fall through could take it to the next support level of 1.3810. The pair is expected to find its first resistance at 1.4162, and a rise through could take it to the next resistance level of 1.4274.

In absence of any macroeconomic releases in Canada today, investor sentiment would be governed by global macroeconomic factors.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

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