CAD Drops Following BoC Decision to Leave Rate at 1 percent

The Bank of Canada left the overnight interest unchanged and stated its opinion on the possibility of future rate hikes, sending the Canadian dollar straight south against all other major currencies today.

The loonie declined even against the US dollar, which is experiencing a rather bad day as of now. The CAD has been bullish before the rate decision was released by the BoC. While the market participants expected that the overnight rate target will be maintained unchanged at 1%, the reaction to the Bank’s statement was very negative for the Canadian currency. The statement suggested that the next rate increases won’t be happening very soon:

US Dollar Rallied This Week, Stalled on Poor Employment Reports

This week was very positive for the US dollar as the US economy showed the signs of the sustainable growth, but the end of the week spoiled the positive sentiment to some degree as the labor market wasn’t as strong as was expected.

Recovering Economy Increased Appeal of Australian Dollar

The Australian dollar headed today to the highest level since 1982 against its US counterpart as the signs of the faster economic growth in the US increased the appeal of the higher-yielding currencies. The currency declined versus the euro.

Yuan Slips as China Raises Interest Rates

The Chinese yuan slipped today as the central bank raised its interest rates in an attempt to curb China’s significant inflation and to prevent the asset-bubble. China’s economic growth makes traders expect another rates hike in the future.

US Dollar Declines vs. Commodity Currencies on Signs of Recovery

The US dollar declined versus the higher-yielding currencies as the macroeconomic reports suggested that the economic recovery is underway, encouraging the investors to take more risk in seeking profits.