Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

BoC Tapers Again, Powell Stays Dovish

By Kenny FisherStock MarketsJul 14, 2021 01:22PM ET
BoC Tapers Again, Powell Stays Dovish
By Kenny Fisher   |  Jul 14, 2021 01:22PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

The Canadian dollar posted considerable gains earlier in the day, but has retreated. Currently, USD/CAD is trading at 1.2491, down 0.18%.

BoC Scales Back QE

At today’s policy meeting, the Bank of Canada maintained its key lending rate at 0.10%, as expected. The bank tapered its bond-buying program for a third straight month, reducing its weekly purchases from CAD $3 billion to $2 billion. While tightening policy at the meeting, the BoC is still sounding dovish about the economy. The bank cut its growth forecast for 2021 from 6.5% to 6.0% and says it does not expect to raise rates prior to H2 of 2022.

What’s next for the BoC?

There are expectations that the bank could wind up asset purchases by the end of the year, with rate hikes to follow. This exit strategy will depend on the Canadian economy continuing to gain steam, but a resurgence of the COVID pandemic could delay these plans.

The Federal Reserve has long insisted that higher inflation levels are transitory and that it plans to maintain its dovish policy stance. However, this position is becoming increasingly difficult to defend, especially in light of the latest surge in U.S. consumer inflation. CPI for June jumped 5.4% and the core reading rose 4.5%, its highest level since 1991. The Fed has tried to adjust to the shifting sands and adopted a more hawkish tone when it projected two rate hikes in 2023, but even that may not be enough for the markets.

Fed Chair Jerome Powell’s testimony does not contain anything new and reiterates the central bank’s dovish stance. Powell said that the economy would have to show “substantial progress” before the Fed tapers stimulus and policy-makers will discuss the issue in coming meetings.

USD/CAD Technical

USD/CAD Daily Chart.
USD/CAD Daily Chart.

  • USD/CAD faces resistance at 1.2594. Above, there is resistance at 1.2735
  • On the downside, there is support at 1.2307. Below, there is support at 1.2161

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

BoC Tapers Again, Powell Stays Dovish

Related Articles

BoC Tapers Again, Powell Stays Dovish

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email