The Canadian dollar rose against most major rivals today following the Bank of Canada’s interest rate decision.

The Bank of Canada cut overnight interest rates by 25 basis points to 2.75%, the lowest since July 2022.

It’s the seventh interest rate cut in the current BOC monetary easing cycle, as inflation remained near the bank’s 2% target. 

Current inflation rates hover around 1.9%, and it comes amid uncertainty in the market and economic disruptions as US President Donald Trump imposes tariffs on steel and aluminum, which went into effect on Wednesday.

Trump repeatedly imposed 25% tariffs on Canada and Mexico and delayed them amid ongoing negotiations with both governments.

The Bank of Canada said that the economic outlook remains uncertain due to the fast changing political landscape, but cautioned that monetary policies couldn’t compensate for the impact of the trade war.

On Sunday, the governing Liberal party chose Mark Carney, the former governor of both Banks of Canada and England, as the new Prime Minister, and he vowed to “build a strong economy in the G7 group”.

Carney is expected to call for early elections, likely in April or May. 

On trading, the CAD/USD pair rose 0.4% as of 19:54 GMT to 0.6958.

Aussie

The Australian dollar rose 0.3% against its US counterpart as of 19:54 GMT to 0.6319.

US Dollar

The dollar index rose 0.1% as of 19:33 GMT to 103.5, with a session-high at 103.7, and a low at 103.3.

US consumer prices rose 2.8% y/y in February, below estimates of 2.9%, and down from 3% in January.

President Donald Trump implemented new 25% tariffs on steel and aluminum imports from around the world, triggering retaliations and concerns about further hits to US economic sentiment. 

Canada’s government is planning additional tariffs on 20 billion Canadian dollars worth of American products, while the EU announced similar retaliatory tariffs on a variety of US products.

Oil prices rose on Wednesday as analysts pore over latest US inventory data and OPEC’s monthly report. 

OPEC maintained its outlook for global oil demand growth at 1.4 million bpd in both 2025 and 2026.

The Energy Information Administration reported a buildup of 1.4 million barrels in US crude stocks last week to a total of 435.2 million barrels, while analysts expected a buildup of 1.2 million barrels. 

Gasoline stocks fell by 5.7 million barrels to 241.1 million barrels, as distillate stocks fell by 1.6 million barrels to 117.6 million barrels. 

The EIA also reported a rise in US local oil demand by over a million bpd to 21.6 million bpd.

On trading, Brent May futures rose 2%, or $1.39 to $70.95 a barrel.

US crude futures due in April rose 2.2%, or $1.43 to $67.68 a barrel.

Gold prices rose on Wednesday with the dollar eking out modest gains against most major rivals following US inflation data. 

US consumer prices rose 2.8% y/y in February, below estimates of 2.9%, and down from 3% in January.

President Donald Trump implemented new 25% tariffs on steel and aluminum imports from around the world, triggering retaliations and concerns about further hits to US economic sentiment. 

Canada’s government is planning additional tariffs on 20 billion Canadian dollars worth of American products, while the EU announced similar retaliatory tariffs on a variety of US products.

Otherwise, the dollar index rose 0.1% as of 19:33 GMT to 103.5, with a session-high at 103.7, and a low at 103.3.

On trading, gold spot prices rose 0.7% as of 19:33 GMT to $2942 an ounce.

The Bank of Canada cut overnight interest rates by 25 basis points to 2.75%, the lowest since July 2022.

It’s the seventh interest rate cut in the current BOC monetary easing cycle, as inflation remained near the bank’s 2% target. 

Current inflation rates hover around 1.9%, and it comes amid uncertainty in the market and economic disruptions as US President Donald Trump imposes tariffs on steel and aluminum, which went into effect on Wednesday.

Trump repeatedly imposed 25% tariffs on Canada and Mexico and delayed them amid ongoing negotiations with both governments.

The Bank of Canada said that the economic outlook remains uncertain due to the fast changing political landscape, but cautioned that monetary policies couldn’t compensate for the impact of the trade war.

On Sunday, the governing Liberal party chose Mark Carney, the former governor of both Banks of Canada and England, as the new Prime Minister, and he vowed to “build a strong economy in the G7 group”.

Carney is expected to call for early elections, likely in April or May.