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“The Bank left rates unchanged at 1.75%, but the overall tone of the statement was dovish reflecting realized and expected downgrades to their economic outlook,” TD Securities analysts said commenting on the BoE’s policy decisions.

Key quotes

“Notably, they softened their forward looking language to state that the timing of future rate increases was uncertain, and they removed the reference to the overnight rate needing to reach the neutral range.”

“The change in the statement effectively ends any hope of a BoC hike in 2019 (slim as it was heading into the meeting). Given their evident desire to lift rates, we can’t rule out the possibility of a rate hike in early 2020, but we will need to see a significant improvement in the outlook to justify further tightening this cycle.”

“FX: The dovish tweak to the Bank’s forward guidance helped USDCAD break through 1.34, given the uncertainty around the cycle. While the market has front-run the BoC a bit into the meeting, the path of least distance screens higher in USDCAD in the very short-run. Tactically, we still prefer short exposure to crosses like SEK.”