Bank of Canada rate cut - expect a further 75bp of cuts in the second half of the yearOn Wednesday the BoC began its interest rate cut cycle, the BOC's first cut in four years:
Canada is the first G7 country to cut rates. do so.
A response from ING to the decision:
- The Bank of Canada has clearly concluded that diminishing inflation worries and excess supply in the economy mean its monetary policy doesn't need to be quite so restrictive.
- This 25bp move is likely to be followed by a further 75bp of cuts in the second half of the year.
- The Canadian dollar is likely to remain under pressure
And, further out:
- USD/CAD short-term risks are moderately skewed to the upside, but in line with our call for US data to start pointing to a September Fed cut, the pair can still find its way into 1.35 in the second half of the year.
This article was written by Eamonn Sheridan at www.forexlive.com.
Source: Bank of Canada rate cut - expect a further 75bp of cuts in the second half of the year (https://www.forexlive.com/centralbank/bank-of-canada-rate-cut-expect-a-further-75bp-of-cuts-in-the-second-half-of-the-year-20240605/)
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