BOC Rate Cut: Overnight Rate Actual 0.25%, Expected 0.25%, Previous 0.25%
Release Explanation: The report covers the discussions that took place at the interest rate meeting that the RBA just completed. It reveals the inner thoughts of Central Bankers and is therefore critical in understanding what each is looking to achieve, and more importantly, how they are looking to get there. Eventually, all releases will be impacted by the consequences of this data as it forms the basis and direction of the next Central Bank meeting. “A currency will eventually be affected by these numbers as institutions re-align existing positions to reflect the Central Banks sentiment, and as they then build new positions in reaction to any new data,” TheLFB-Forex.com Trade Team said.
TheLFB-Forex.com Trade Desk Thoughts: The Bank of Canada today maintained the overnight target rate at 0.25% and reiterated its conditional commitment to hold current policy rate until the end of the second quarter of 2010.
Information received since the Bank's April monetary policy report has been broadly consistent with the Bank's medium-term outlook for output and inflation in Canada. The economy is undergoing major restructuring in a number of sectors. The output gap will continue to widen through the third quarter, putting downward pressure on inflation. The Bank continues to expect that the global and Canadian recoveries will be more muted than usual.
Forex Technical Reaction: The cad has traded in a wide range overnight and has moved higher since the report was released, trading near 1.1070.