On Thursday (Oct 27), / choppy downside, temporarily traded at 1.3556, up 0.01%.
It has raised rates by 350 basis points since March.
Until now, Canadian officials had maintained relatively hawkish rhetoric on fighting inflation and expected to continue raising interest rates in the coming months.
But now markets are skeptical about the Bank of Canada’s willingness to raise rates further.
“We’re getting closer to the end of the tightening phase, but we’re not there yet,” said Bank of Canada Governor Steve McClem.
At what level, he added, it would depend on how demand was moderated, how supply challenges were addressed and how inflation and inflation expectations were addressed.
The central bank is still far from its 2% inflation target, but is trying to balance the risks of too little tightening with too much.
Usd/CAD initially surged on the back of the Bank of Canada, but firmed from the peak as the impact of less dovish rate hikes began to sink in.
According to the DXY chart below, the dollar is now at a crossroads, but bulls should hold on to the front of the trendline.
