EUR/CAD soars after Bank of Canada rate statement

• EUR/CAD jumps 80 pips after the Bank of Canada (BoC) Monetary Policy Report. 

• The BoC leaves its interest rate unchanged. 

The EUR/CAD gained about 80 pips after the Bank of Canada left its interest rate unchanged. It is trading now at around 1.5629 up 0.66% on Wednesday.

The reasons for BoC to hold rates unchanged:

“The transitory impact of higher gasoline prices and recent minimum wage increases will likely cause inflation in 2018 to be modestly higher than the Bank expected in its January Monetary Policy Report.” 

“GDP growth in the first quarter was weaker than the Bank had expected, but should rebound in the second quarter, resulting in 2% average growth in the first half of 2018.”

The report additionally says:

“Some progress has been made on the key issues being watched closely by Governing Council, particularly the dynamics of inflation and wage growth. This progress reinforces Governing Council's view that higher interest rates will be warranted over time, although some monetary policy accommodation will still be needed to keep inflation on target”

EUR/CAD 4-hour chart

Support is seen at 1.550 psychological level and at 1.5475 swing low. Resistance lies at 1.5682 swing high and then at 1.5752 swing high.