BoC: No change, a dovish statement – NFB
|At today’s Board meeting, the Bank of Canada (BoC) kept the key interest rate unchanged at 1.75% today. According to Krishen Rangasamy and Paul-André Pinsonnault, analysts at National Bank of Canada, point out that the statement was dovish as the central bank highlighted risks and downplayed the positive growth surprise of the second quarter.
Key Quotes:
“The no-change decision was largely expected. The tone of the statement, however, was dovish, with the BoC downplaying the Q2 upside surprise on GDP growth and emphasizing instead the escalating trade war and potential negative impacts on the Canadian economy.”
“The BoC’s updated projections will be available next month but in light of today’s message, one can expect a downgrade to the central bank’s growth forecasts particularly for 2020. Developments on the trade front (i.e. U.S.-China negotiations) will be crucial in determining what the central bank does next given the impact they will have of global and hence Canadian growth. If, as we expect, there are positive developments on the trade front, the BoC needs not alter its current policy stance.”
“The central bank may be forced to follow the Fed in easing policy significantly. Investors would be wise to watch the central bank’s future communications closely for clues about the BoC’s inclination on policy, starting tomorrow with Deputy Governor Lawrence Schembri’s presentation of an Economic Progress Report.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.