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
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