The Bank of Canada left the key rate unchanged at the meeting on Wednesday and announced new bond purchase programs, saying that the coronavirus pandemic could provoke the strongest recession in the Canadian economy in the short term.
The aid to the Canadian provinces may amount to 50 billion Canadian dollars, plus another 10 billion will be given to key Canadian companies through a bond redemption mechanism.
The Canadian regulator has adopted the habit of pouring money into the economy. The increase in the money supply should weaken #USDCAD, however, against the background of the trillions of dollars that the US Fed is pumping in, these are mere crumbs. Therefore, the factor of increasing the money supply can be safely ruled out.
In the bottom line, we have only positive drivers:
- growing oil (within the framework of the year) and economic support from the Central Bank.
- We confirm the forecast to reduce #USDCAD to 1.3000 in the next 4 months. #interestrate #Fed #oil