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Trump’s Comments Move US Dollar Down; Bank of Canada Offers Changed Tone

Published April 13, 2017
  • The Canadian dollar moved higher against its US counterpart throughout the day yesterday; Stephen Poloz and the Bank of Canada held interest rates steady at 0.50% while offering a brighter outlook for its 2017 Canadian growth forecast
  • The Bank acknowledged the recent strong Canadian data while iterating the potential temporary nature of this strength; the Bank is also wary of ongoing uncertainties that could affect the loonie
  • Poloz’s tone highly indicated there will not be an interest rate hike in the near term; Ultimately, Poloz’s comments on closing the output gap earlier than the original mid-2018 timeline was enough to strengthen the loonie
  • US President Donald Trump pushed the US Dollar lower after stating that the greenback is “getting too strong”; Trump also criticized the Federal Reserve’s interest rate hike schedule in stating that he would like to see lower rates for longer
  • Canadian Manufacturing Sales shrank by -0.2%; the Canadian dollar largely remains at the whims of oil prices and US dollar movements
  • US Unemployment Claims fell to 234,000 versus an expectation of 242,000; the US purchasing price index shrank unexpectedly at a rate of -0.1%