The minutes of the Bank of Canada meeting have been released. Some of the highlights
- The Bank of Canada's decision to cut rates by 50 BPS on December 11 was a close call – minutes of the Governing Council meeting.
- Members considered arguments for both a cut by 25 BPS and 50 BPS.
- Those in favor of a 50 BPS cut admitted that not all data wanted such a reduction on December 11.
- This group said that a cut of 50 BPS was unlikely to bring rates below what they would need to exceed in the next couple of meetings.
- Those in favor of a 25 BPS cut suggested that policy could be patient as the full impact of past cuts became clearer.
- The decision to cut by 50 BPS reflected a weaker than expected growth outlook and the fact that monetary policy no longer needs to be restrictive.
- There were different views on how much more the policy rate needed to be reduced, and over what period of time that should happen.
- Members agreed that they would likely consider further reductions in the policy rate at future meetings, and that they would make each decision one meeting at a time.
A 50 bp cut was expected at the time. The USDCAD has moved back to the downside ahead of the minutes with the price dropping to confirm the 100 hour MA at 1.4372. A move below that and the downside of the trend line would be broken, opening the door wider for the sellers with work to do. The 200 hour MA is at 1.4290 (and moving higher) and would have to be broken to further increase the bearish bias for the sellers. Absent, that and the buyers and sellers are still fighting near arrogance.
Today's high price stopped near Friday's high and ahead of last week's high indicating two-way flows ahead of the recent high.
