- Bank of Canada leaves policy rate steady at 1.75% as expected.
- BoC statement makes no mention of future rate moves.
- With the initial reaction, CAD gathers strength against its rivals.
In a widely expected decision, the Bank of Canada announced that it left the policy rate steady at 1.75% at its September policy meeting.
With the initial market reaction, the USD/CAD pair slumped below the 1.33 mark and was last seen trading at 1.3280, losing 0.28% on the day. Below are some key takeaways from the policy statement, via Reuters.
“Degree of monetary policy status remains appropriate; statement makes no mention of future rate moves.”
“US-China trade conflict is weighing more heavily on global economic momentum than the bank projected in its July monetary policy report.”
“Economy is operating close to potential and inflation is on target, but trade conflicts and related uncertainty are taking a toll on Canadian and global economies.”
“Will pay particular attention to global developments and their impact on the outlook for Canadian growth and inflation.”
“Housing activity has regained strength more quickly than expected as resales and housing starts catch up with underlying demand, supported by lower mortgage rates.”
“Overall inflation rate was higher than expected in July, largely due to temporary factors; banknotes core inflation measures all remain around 2%.”
“Concerns about global growth prospects, combined with central bank responses, have pushed bond yields to historic lows and inverted yield curves in a number of economies, including Canada.”
“US growth has moderated but remains solid, supported by consumer and government spending.”
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