The BOC trimmed rates 25 bp, as expected, setting the stage for a Fed cut next week and an ECB cut the week after. With commodities, stocks and homes in a full-fledged deflation, the global central banks will keep the monetary spigots open in the months ahead.
USD/CAD is being boosted by the decline in rates, the broad-based fall in commodities and the very tough prospects ahead for Ontario’s manufacturing base which is heavily reliant on autos.
1.2120 is putting up a fight on the topside near-term. A break targets 1.2260, a level not seen since August 2005.
