In the Asian session on Thursday (June 8), USD/CAD fell to 1.3365, a drop of 0.06%. The Bank of Canada defied market expectations and restarted rate tightening measures, saying the economy is currently overheating.
The latest from the Bank of Canada:
Today the Bank of Canada raised interest rates to 4.75%, the highest level since 2001. Overall, excess demand in the economy appears to be more persistent than expected, the bank said in its rate statement. The statement, however, did not come with a series of new forecasts. Since announcing a conditional pause in rate hikes in January, policymakers have warned that further hikes may be necessary. While some Canadians are feeling the pinch of rising borrowing costs, the central bank‘s move suggests officials are concerned that growth momentum won‘t slow enough without another rate hike.
