Breaking: Bank of Canada leaves policy rate unchanged at 4.5% in April as expected

FXStreet Team FXStreet

The Bank of Canada (BoC) announced on Wednesday that it left the benchmark interest rate unchanged at 4.5% following the April policy meeting. This decision came in line with the market expectation. BoC Governor Tiff Macklem will be delivering his comments on the policy outlook and respond to questions at a press conference starting at 1500 GMT.

In its policy statement, the BOC said that the Governing Council will continue to assess whether monetary policy is sufficiently restrictive and added that they remain prepared to raise rates if needed.

Market reaction

With the initial reaction, USD/CAD edged lower and was last seen losing 0.1% on the day at 1.3450.

Key takeaways from the policy statement

"Getting inflation down to 2% could be hard because inflation expectations are coming down slowly, service price inflation and wage growth remain elevated."

"In Canada, demand is still exceeding supply and labor market remains tight; wage growth still elevated relative to productivity growth."

"Inflation in many countries is easing in face of lower energy prices, normalising supply chains and tighter monetary policy."

"BoC expects inflation to fall quickly to around 3% in mid-2023 and then decline more gradually to 2% target by end-2024."

"Will continue the policy of quantitative tightening."

"As more households renew mortgages at higher rates and restrictive monetary policy starts to work it way through economy, 2023 consumption is expected to moderate."

Author

FXStreet Team

FXStreet

EUR/USD struggles to regain momentum in the low1.1600s

EUR/USD is giving some signs of life in the aftermath of two severe days of losses on Wednesday, reclaiming the 1.1600 hurdle and above on the back of the resurgence of a mild selling bias around the US Dollar. Moving forward, the usual US weekly Claims will take centre stage on Thursday ahead of Friday’s crucial NFP data.

GBP/USD appears bid around 1.3370

GBP/USD reverses part of its recent multi-day decline, gathering some balance and managing to reach the 1.3400 region, where some initial resistance seems to have turned up. Cable’s uptick comes in response to some loss of momentum in the Greenback despite the geopolitical scenario remaining fragile.

Gold recovers modestly despite intensifying Middle East crisis

Gold keeps its daily gains well in place, although a break above the $5,200 mark per troy ounce still remains elusive on Wednesday. The yellow metal’s rebound comes in response to the persistent flight-to-safety amid intense geopolitical tensions in the Middle East and the bearish performance of the US Dollar.

XRP rises alongside peers as ETFs attract inflows

Ripple (XRP) is gaining upside momentum, trading above $1.40 at the time of writing on Wednesday. The remittance token is rising in tandem with major crypto assets, including Bitcoin (BTC), which has crossed above the pivotal $70,000 level, and Ethereum (ETH), which is holding above $2,000.

First Venezuela, now Iran: The US-China energy war escalates

At first glance, the latest escalation involving the United States with both Iran and Venezuela looks like another chapter in a long-running geopolitical story. But viewed through a broader strategic lens, something else may be unfolding: Energy.

Bittensor extends recovery despite retail demand slump

Bittensor, a leading Artificial Intelligence token, is aging up above $190 at the time of writing on Wednesday. Steady price increases characterise the broader crypto market, with Bitcoin holding above $71,000 and Ethereum above $2,000.