The post BoC’s Macklem raises prospect of big rate cuts appeared on BitcoinEthereumNews.com.

Bank of Canada Governor Tiff Macklem said on Sunday that he has opened the door to accelerating the pace of interest rate reductions. Macklem further stated that policymakers could switch to 50 basis point (bps) moves should growth disappoint, per the Financial Times.  Key quotes As you get closer to the target, your risk management calculus changes.  You become more concerned about the downside risks. And the labour market is pointing to some downside risks. It could be appropriate to move faster interest rates.  We expect to see rent price inflation come down.  Market reaction  At the time of writing, USD/CAD is trading 0.06% lower on the day to trade at 1.3580.  Canadian Dollar FAQs The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive. The price of Oil…

---

Filed under: News - @ September 16, 2024 12:23 am