Market News & Analysis

Top Story

BoC Slashes Rates to 0.25%

Yet another Central Bank holds an emergency meeting and cuts interest rates.  It seems like it was only a matter of time before the Bank of Canada (BoC) made another inter-meeting move and cut rates by 50bps from 0.75% to 0.25%, falling in line with other major central banks around the globe.  This decision followed a similar emergency rate cut of 50bps on March 13th from 1.25% to  0.75%.  In addition,  the Bank announced a Quantitative Program of its own, as well as the Commercial Paper Purchase Program (CPPP) to make sure there is liquidity in the short-term funding markets for companies to operate on a day-to-day basis.  BoC Governor Stephen Poloz said that there is room to move lower if needed, while BoC’s Wilkins added that “there are still tools in the toolkit, including easing and funding for financial instructions to lend to businesses.”  This follows along the lines of many other central banks that it will do whatever is necessary.

The USD/CAD was had gone bid on the initial headline from 1.4118 to 1.4153, however an hour later the pair was trading back near the 1.4115 level.

Source:  Tradingview, City Index

On a daily timeframe, price had gapped higher on March 9th from 1.3420 to 1.3550 when Saudi Arabia announced they would begin to pump as much oil as possible after Russia said they would not join with OPEC on cutting production.  The price of crude oil began to move lower and the USD/CAD began its move higher.   The Canadian economy relies a great deal on its crude exports, therefore, the price of crude affects the value of the USD/CAD.   The pair peaked on March 19th near 1.4675 before pulling back to yesterday’s close at 1.4010, which is the 38.2% retracement from the December 31st, 2019 lows to the March 19th highs.  There is also horizontal support and big psychological support level at 1.4000.  Today, USD/CAD traded briefly below this level to 1.3988 before bulls came in and brought the pair higher.

 Source:  Tradingview, City ndex

What’s different about today’s announcement compared to previous rate cut decisions?  Notice on a 240-minute timeframe that on the previous 2 dovish BoC announcements, price went higher on the announcement and continued higher.  Although there is time left in the current candle, it is currently putting in a bearish engulfing candlestick formation, indicating a continued move lower on a 240-minute timeframe.  This tells us that traders weren’t impressed with the rate cut and may have even been expecting it.  Immediate resistance comes in a today’s highs and a downward sloping trendline near 1.4150.  Above that is horizontal near 1.4180 and then horizontal resistance once again at 1.4300.  First support is the previous mentioned 1.3988/1.4000 (on the daily timeframe).  However, below that there isn’t much until the 50% retracement of the previous mentioned move near 1.3820 and then horizontal support near 1.3700.

Source:  Tradingview, City Index

Although the BoC had an emergency meeting and cut rates again today, this didn’t seem to have much of effect on the market.  If anything,  the market seems to have taken it as “catching up” to other global central banks.


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.