Canadian Dollar Plunges on Dovish BoC and FOMC Rate Decision

The Canadia dollar was on a losing streak today as investors digested yesterday’s dovish comments by the Bank of Canada regarding the currency’s value. The USD/CAD currency pair today rallied higher as investors sold the loonie after realising that Canada’s central bank was very uncomfortable with its strength.
The USD/CAD currency pair today rallied from an opening low of 1.2699 to a high of 1.2790 in the American market after the FOMC interest rate decision lifted the US dollar.
The currency pair rallied higher in a delayed response to comments made by Tiff Macklem the Bank of Canada Governor regarding the loonie. Macklem said that the Canadian dollar’s strength is hurting the competitiveness of the country’s exports to the US. He indicated that the bank was considering further monetary easing measures such as lower interest rates to limit the loonie’s appreciation. The release of the upbeat Canadian inflation data for November had a minimal impact on the pair. According to Statistics Canada, the country’s inflation rose 0.1% versus consensus estimates of a flat reading.
The currency pair spiked to its daily highs after the FOMC interest rate decision after the Fed maintained its current rates and promised to keep buying bonds worth $120 billion monthly. However, the Fed did not extend the programme’s duration limiting the US Dollar Index‘s gains.
The currency pair’s future performance is likely to be affected by tomorrow’s Canadian employment data.
The USD/CAD currency pair was trading at 1.2737 as at 20:27 GMT having rallied from a low of 1.2699. The CAD/JPY currency pair was trading at 81.19 having dropped from a high of 81.62. 
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Original from: www.earnforex.com