Reuters ahead with surprise Bank of Canada rate cut; market reacts
Reuters was ahead with news of a surprise Bank of Canada (BOC) rate cut that came on Friday as policy leaders unveiled dramatic fiscal and economic measures amid the coronavirus outbreak. At the same time, Ottawa pledged C$10 billion ($7.2 billion) in credit support for businesses and pledged to do whatever was necessary to protect Canadians. The central bank unexpectedly cut its overnight interest rate by 50 basis points to 0.75% after taking the same step on March 4. It was the first unscheduled cut since the financial crisis of 2008.
Canada’s yield curve steepened on the news, with the gap between 2- and 10-year yields hitting the widest since June 2018, at 30 basis points. The Canadian dollar weakened to a 4-year low of 1.4188 to the U.S. dollar.