The Canadian dollar, paired with the US dollar, has strengthened. The current USDCAD exchange rate stands at 1.3678.
In the medium term, the pair remains within a wide sideways channel.
Yesterday, the Bank of Canada reduced the interest rate for the first time in four years to 4.75% per annum from the previous 5.00%. The regulator cited the progress achieved in its battle against inflation as an argument for this decision. According to the Bank of Canada’s press release, the core Consumer Price Index is declining, providing a reason to abandon restrictive monetary policy.
At least four inflation components improved significantly, including core inflation, the core price index with its median and average values, and the 3-month moving average.
Some CPI components rose by over 3%, close to a historical average value.