It seems that the world’s central banks are now noticing that “supply disruptions” are impacting inflation a lot more than anticipated. The Bank of Canada ended its bond-buying stimulus program and accelerated the potential timing of future interest rate increases amid worries that supply disruptions are driving up inflation. With the end of the quantitative easing, the BoC also announced they could be ready to hike borrowing costs as early as April, as supply constraints limit the economy’s ability to grow without fueling inflation.
The Canadian dollar rallied to the USD on this news, after yesterday afternoon’s weaker close, it was the widest range in past while. The question is whether the Federal Reserve will follow suit as quickly, if so, then expect the USD to rally back.
Expect a narrow range the rest of the day.
Currently* Close Range
USDCAD 1.2333 1.2388 1.2303-1.2431
EURCAD 1.4308 1.4369 1.4297-1.4441
GBPCAD 1.6949 1.7053 1.6907-1.7078
*Indicative Rates Only
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