USD/CAD Snaps Lower, Canadian Dollar Soars As BoC Tapers Policy

The Canadian Dollar is gaining a considerable amount of ground during Tuesday afternoon trade. USD/CAD price action just snapped 40-pips lower while CAD/JPY spiked 32-pips higher in immediate reaction to the Bank of Canada announcement just crossing market wires. The Bank of Canada just stated that it is removing its emergency lending programs, such as its term repo facility, in a move toward tapering monetary policy.

 

USD/CAD PRICE CHART: 15-MINUTE TIME FRAME (22 MAR TO 23 MAR 2021)

USDCAD Price Chart Canadian Dollar Technical Outlook

The Bank of Canada also noted that it will not renew commercial paper, province, or corporate bond purchases. That said, the BoC conveyed that it will continue its current pace of QE at C$4-billion per week. This could be helping USD/CAD retrace a bit of its move lower. Furthermore, BoC Deputy Governor Gravelle also mentioned that scaling back bond purchases will be gradual, adding that adjusting QE won’t necessarily signal a change in views on when to raise the central bank’s benchmark interest rate.

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