The Central Bank of Canada cut the interest rate on the Canadian dollar by 0.75% to a 50-year low
(from 2.25% to 1.5%). The bank acted more aggressively than anticipated, most of the market participants
where expecting a 0.5% cut.
This is just another aggressive action in a recent chain of aggressive actions by central banks (the ECB and the BOE last week). All in hope a strong stand could put an end to the global economic deterioration.
The Forex market reacted to the news as expected, and any good fundamental trader could have enjoyed selling the Canadian dollar today.
The USDCAD was up from 1.2580 to 1.2740 as the news came out at 14:00 GMT. If you are still trading long on this pair, pay close attention to the daily resistance area at 1.2980.
EURCAD as also gaining after the news, moving from 1.6200 to 1.6370.
CADJPY was maybe the safest sell today in light of the recent global strength of the Yen. This pair headed down to 72.5 after the interest cut.
If it continues to drop in the coming days, we should pay attention to the major support level around 70.8.
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