5 June 2012 14: 03 GMT 
the Central Bank to take: Canada maintains its reference to 1.00% rate > the global growth Outlook weakened while Canadian growth is less balanced and Inflation is Well-anchored > CAD slips against major peers
When monetary policy meeting today, the Bank of Canada decided to maintain the interest rates to 1.00% for the thirteenth time in a row, extending its longest break since the 1950s. The target rate has remained unchanged since September 2010, after three consecutive increases of 25% 0.25 basis points. Decision of the Bank of the Canada rate was not surprised the market that it corresponded to the median projections of Bloomberg News survey. The discount rate is proportionally 1.25% and the deposit rate is 0.75 per cent.
The Bank cited weak prospects for global growth and domestic growth slower than expected as the main reasons to defer interest rates increase. As the Bank released its April monetary policy (MPR) report, the global economiccondition has deteriorated in recent weeks. Risks around the European crisis has intensified, including political unrest in Greece and its possible exit of Euro, the fears of banking crisis in Spain and the threat of contagion of debt in the euro area. In addition, the American economy continues recovery at a modest pace and especially in emerging market economies have slowed.
At last Friday's GDP report showed that the economy expanded at an annualized rate of only 1.9% to 2.5% Central Bank forecasts and has remained unchanged since the fourth quarter, growth. The composition of growth has become "less balanced" housing activity is stronger than expected but households continue to add to their burden of debt the modest revenue growth.On the price front, inflation appears to have entered a period of stability with the basic price index should be the objective of 2% of the Bank.
The Bank reiterated in his statement that "persistent force currency" dollar Canadian has been an ongoing challenge for tenth largest economy from domestic currencies of the world reduces foreign demand and hurt net exports. Responsible Canadian policies have continued to support wait them and observe everything to agitate on any withdrawal of this stimulus considerable of monetary policy in economic expansion continues and excess supply is gradually absorbed. "The calendar and the degree of any withdrawal will be"weighted carefully"against national and global economic developments", pointed out the Bank.
Chart 1-minute USDCAD: 5 June 2012
Graph created with strategy trader - prepared by Trang Nguyen
In the minutes following the decision of the Bank of Canada rates, the Canadian Mint immediately reduced gains against its major currencies. As is the 1-minute chart above, the pair USDCAD removed about 40 pips 1.0375 1.0420 within five minutes. Apparently, current weakness in the global economy and stable inflation curbing speculation on if interest rates increase soon. During the writing of this report, the New Zealand dollar was transferred to $1.0375
-Written by Trang Nguyen, DailyFX research team of DailyFX.com
Contact Trang, by e-mail at tnguyen@dailyfx.com
DailyFX provides news forex and technical analysis on trends affecting the world market currencies.
Learn forex trading with a free account of practice and exchange of graphics of FXCM.
5 June 2012 14: 03 GMT
the Central Bank to take: Canada maintains its reference to 1.00% rate > the global growth Outlook weakened while Canadian growth is less balanced and Inflation is Well-anchored > CAD slips against major peers
When monetary policy meeting today, the Bank of Canada decided to maintain the interest rates to 1.00% for the thirteenth time in a row, extending its longest break since the 1950s. The target rate has remained unchanged since September 2010, after three consecutive increases of 25% 0.25 basis points. Decision of the Bank of the Canada rate was not surprised the market that it corresponded to the median projections of Bloomberg News survey. The discount rate is proportionally 1.25% and the deposit rate is 0.75 per cent.
The Bank cited weak prospects for global growth and domestic growth slower than expected as the main reasons to defer interest rates increase. As the Bank released its April monetary policy (MPR) report, the global economiccondition has deteriorated in recent weeks. Risks around the European crisis has intensified, including political unrest in Greece and its possible exit of Euro, the fears of banking crisis in Spain and the threat of contagion of debt in the euro area. In addition, the American economy continues recovery at a modest pace and especially in emerging market economies have slowed.
At last Friday's GDP report showed that the economy expanded at an annualized rate of only 1.9% to 2.5% Central Bank forecasts and has remained unchanged since the fourth quarter, growth. The composition of growth has become "less balanced" housing activity is stronger than expected but households continue to add to their burden of debt the modest revenue growth.On the price front, inflation appears to have entered a period of stability with the basic price index should be the objective of 2% of the Bank.
The Bank reiterated in his statement that "persistent force currency" dollar Canadian has been an ongoing challenge for tenth largest economy from domestic currencies of the world reduces foreign demand and hurt net exports. Responsible Canadian policies have continued to support wait them and observe everything to agitate on any withdrawal of this stimulus considerable of monetary policy in economic expansion continues and excess supply is gradually absorbed. "The calendar and the degree of any withdrawal will be"weighted carefully"against national and global economic developments", pointed out the Bank.
Chart 1-minute USDCAD: 5 June 2012
Graph created with strategy trader - prepared by Trang Nguyen
In the minutes following the decision of the Bank of Canada rates, the Canadian Mint immediately reduced gains against its major currencies. As is the 1-minute chart above, the pair USDCAD removed about 40 pips 1.0375 1.0420 within five minutes. Apparently, current weakness in the global economy and stable inflation curbing speculation on if interest rates increase soon. During the writing of this report, the New Zealand dollar was transferred to $1.0375
-Written by Trang Nguyen, DailyFX research team of DailyFX.com
Contact Trang, by e-mail at tnguyen@dailyfx.com
DailyFX provides news forex and technical analysis on trends affecting the world market currencies.
Learn forex trading with a free account of practice and exchange of graphics of FXCM.
5 June 2012 14: 03 GMT
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