The Bank of Canada meeting minutes were released. Some of the highlights
- Bank of Canada decision to cut rates by 50 BPS on Dec 11 was a close call – minutes of Governing Council meeting.
- Members discussed arguments both for cutting by 25 BPS and 50 BPS.
- Those in favor of a 50 BPS cut acknowledged that not all data called for such a reduction on Dec 11.
- This group said it seemed unlikely that a cut of 50 BPS would take rates lower than they needed to go over the next couple of meetings.
- Those in favor of a 25 BPS cut suggested policy could be patient while the full effects of past cuts became clearer.
- Decision to cut by 50 BPS reflected weaker-than-expected growth outlook and the fact that monetary policy no longer needed to be clearly restrictive.
- There was a range of views on how much further the policy rate would need to be reduced, and over what period that should happen.
- Members agreed that they would likely be considering further reductions in the policy rate at future meetings, and they would take each decision one meeting at a time.
The expectations was for a 50 bp cut at the time. The USDCAD has moved back to the downside ahead of the minutes with the price dipping to test the 100 hour MA at 1.4372. A move below that and the underside of the broken trend line, would open the door more so for the sellers with work to do. The 200 hour MA is at 1.4290 (and moving higher) and would need to be broken to increase the bearish bias more for the sellers. Absent, that and the buyers and sellers are still battling near highs.
THe high price today did stall near the high from Friday and ahead of the high from last week indicative of two-way flows ahead of the recent high.
