“The Bank of Canada acknowledged recent weakness in the energy sector and delivered a dovish message in today’s communique,” TD Securities analysts note.
Key quotes
“They noted that economic momentum was slowing into Q4, and perhaps most tellingly stated that there was more room for non-inflationary growth.”
“The negative spin on the economy makes a January rate hike unlikely. The Bank remains committed to moving rates back to the neutral range, but it looks like the normalization process will be more gradual than anticipated. March remains very much live.”
“FX: The policy statement contained little positive news for the loonie. The next level to watch for USDCAD is 1.34, where we see HFFV, although we prefer to play CAD weakness on the crosses with NOK and GBP the most attractive candidates.”
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