In the Asian session on Thursday (June 8), USD/CAD fell to 1.3365, a drop of 0.06%. According to the decision of the Bank of Canada, the interest rate hike reflects concerns that monetary policy constraints will not be strong enough to bring supply and demand back into balance.
The latest from the Bank of Canada:
The Bank of Canada’s rate decision statement removed language from April about how the bank was prepared to raise rates further if needed. Continue to expect CPI inflation to fall back to around 3% in the summer, but no longer mention the target that inflation will gradually fall to 2% by the end of 2024. The Bank of Canada decision showed underlying global inflation remains stubbornly high, with major central banks signaling that further interest rate hikes may be needed to restore price stability. Still firmly committed to restoring price stability, excess demand in the economy looks more persistent than expected.
