The Monetary Policy Committee at the Bank of Canada decided, after the conclusion of the January meeting on Wednesday, to lower interest rates by 25 basis points, as widely anticipated by market expectations. This marks the third consecutive reduction in interest rates by the bank, bringing the main interest rate in Canada down to 3.00%, from 3.25%.
In just a few minutes, we will provide you with the main highlights from the interest rate statement issued by the Monetary Policy Committee at the Bank of Canada, which offers a clearer insight into the bank's decisions and the economic situation within the country. This will have a strong impact on the Canadian dollar's trading against other currencies.
It is worth noting that the Bank of Canada makes its interest rate decision regarding the overnight financing rate based on lending and borrowing among major financial institutions within the country. Traders are closely watching changes in interest rates, as short-term interest rates measure currency value. The higher the interest rates rise beyond expectations, the more positive it is for the Canadian dollar; conversely, if they drop more than expected, it negatively impacts the Canadian dollar.
