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BOC leaves rates unchanged, expresses optimism – USD/CAD falls

As expected, the interest rate in Canada remains at 0.50%. The accompanying statement consists of optimism about domestic spending as well as the  ongoing recovery in the US, Canada’s most important trade partner.

USD/CAD slips to 1.32 from higher levels. Update: the drop continues to 1.3162.

The BOC is also pleased with the positive impact of the lower exchange rate which mitigates the drop in oil prices. The inflation outlook  remains unchanged from the previous meeting back in July.

On the downside, the team led by Poloz does note  uncertainty over exports and and especially about China and other emerging markets. However, the general impression is that the positives  outweigh the negatives.

The Bank of Canada was expected to leave the interest rate unchanged at 0.50% but some  had expected a cut. The prices of oil  has been hit and Canada is now officially in a recession. However, employment seems solid. As always, the language of the accompanying statement is as important as the actual decision.

USD/CAD traded around 1.3235 towards the publication.

Earlier, Canadian housing starts and building permits both beat expectations.

There is calm in the  global gloom, but as we have seen in the past, the C$ dropped with oil but couldn’t really recover when oil recovered.

More:  USDCAD Looks To Extend Bullishness, Eyes The 1.3352 Zone

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.