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,” Trade Team said. Trade Desk Thoughts: The Bank of Canada today cut its main policy rate to 0.25%, and confirmed again that it could follow the Federal Reserve by maintaining a program of quantitative easing. “The Bank of Canada had already lowered the interest rates by 350 basis points since February 2008, and injected as much as C$41 billion into financial markets to spur lending, sought wider legal power to fix markets and accepted new types of collateral. This takes the drop to 375 points in just over a year. The federal government is also buying up billions of mortgages to give banks more cash to use for new loans,” Trade Team noted.

Forex Technical Reaction: “The initial moves were higher on Usd/Cad, but the pair is trapped at 1.2500 as resistance (50 day SMA), it has 1.2300 support (20 day SMA), whilst currently trading at the 100 day SMA at 1.2400,” the trade Team said. “That leaves little room for an intra-day play to do anything but bounce around looking for bids, but may set up a longer-term signal that we can get posted once the initial noise at 09:00 EDT is out of the way. There is a negative feel to equities, and a negative feel to earnings releases; just the same as on Monday. The difference today is that the major pairs do not seem to want to move and that may impede the cad reaction. We will be looking for a reaction to the 1.2500 test. Falling oil prices will add to Usd strength”.