Loonie strengthens during BoC conference

USDCAD currency pair is experiencing increased volatility today and returns to gains after a temporary sell-off. During the conference, BoC Governor Macklema said:

• Canada needs higher interest rates, the economy can handle them
• The central bank can react strongly if the need arises
• The bank may apply interest rates above the neutral rate to stifle inflation
• Interest rates will rise to the range of 2-3%, but it cannot be ruled out that when approaching this level, further increases will be stopped if inflationary pressure decreases

A bit more hawkish remarks compared to the opening statement. We have a declaration that rates may rise even above 3% if inflationary pressure persists. As a result, USDCAD drops below the key resistance at 1.2650. Crude oil also resumed upward move after the mixed DOE report, which is an additional supporting factor for Loonie.

Source: xStation5