As expected, the BOC left the interest rate unchanged at 1%. Contrary to many other central banks, the Bank of Canada has prospects for tightening monetary policy.
USD/CAD was trading around 0.9880 before the release. It has fond a clear floor at 0.9840 – a floor that was successfully tested over and over again. Following the publication, the pair is sliding to 0.9870.
Here is a hawkish line from the statement:
some modest withdrawal of the present considerable monetary policy stimulus may become appropriate
Mark Carney and his associated are relatively cautious, but in comparison to other central banks, they are hawkish.
In a previous public appearance, Carney discussed “full employment” in the future. Canada continues enjoying a relatively healthy job market, something that many other developed countries can envy.
For more on the loonie, see the Canadian dollar forecast.