Canadian Dollar Collapses on BoC Comments

Posted by Drew Zimmerman

Share on Facebook

Tweet on Twitter

The Canadian Dollar futures fell to new lows (90.25) this morning on statements made by the Bank of Canada.

“Inflation in Canada has moved further below the 2 per cent target, owing largely to significant excess supply in the economy and heightened competition in the retail sector. The path for inflation is now expected to be lower than previously anticipated for most of the projection period. The Bank expects inflation to return to the 2 per cent target in about two years, as the effects of retail competition dissipate and excess capacity is absorbed.”

The softness in the inflation outlook is what I believe spooked the market more than they had been expecting and brought the swift sell off in the Canadian Dollar.

 

Drew Zimmerman

Investment & Commodities/Futures Advisor

604-664-2842 – Direct

604 664 2900 – Main

604 664 2666 – Fax

800 810 7022 – Toll Free

dzimmerman@pifinancial.com