Daily digest market movers: Canadian Dollar climbs, Greenback slides on CB-heavy Wednesday

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  • BoC Governor Tiff Macklem:
    • Most likely won’t achieve 2% inflation this year.
    • Shelter price inflation weighs on BoC decisions.
    • Overwhelming consensus within BoC that rates need to stay at 5%.
    • Looking for consistency across all inflation indicators.
    • BoC's Tiff Macklem: The governing council unanimously agreed to maintain rates at 5%
  • Federal Reserve Chair Jerome Powell:
    • There is no reason to think the economy is in or faces significant near-term risk of recession.
    • Fed sees ongoing solid growth, should continue moving forward.
    • Would like to have more confidence on inflation. Fed has some confidence but needs more.
    • Jerome Powell Speech: Fed Chair doesn't see elevated risk of recession
  • According to Canadian money markets, there is less than 25% odds of a BoC rate cut in April, down from over 40% before Tiff Macklem’s appearance on Wednesday.
  • The US ADP Employment Change came in below expectations, printing at 140K for February versus the forecast of 150K, while the previous print saw a revision up to 111K from 107K.
  • Canada’s seasonally-adjusted Ivey Purchasing Managers Index (PMI) eased to 53.9 in February versus the previous month’s 56.5

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