BOC’s Poloz: BOC was leaning towards cutting rates even without virus
|The Bank of Canada (BOC) Poloz is back on the wires now, via Reuters, making some comments on the central bank’s 50bps rate cut announced on Wednesday.
Key quotes
Expect to see consumer confidence declining as virus unfolds, hope lower rates will mitigate the decline.
BOC was leaning towards cutting rates even without virus.
We expect rate cut to boost housing activity more than otherwise.
Large scale asset purchases are part of our tool kit, we are fortunate not to have had to use them.
Level of coordination with other central banks is the highest i have experienced as governor.
We had more than enough reasons to cut rates without bringing coronavirus into consideration.
Wanted to cut rates in a decisive manner, to get out in front before economy feels effects of coronavirus.
Fact the US fed moved in the middle of our discussion of course mattered to us.
Changes to b20 stress tests are desirable because it makes tests more sensitive.
Bank will have to wait and see how things unfold and see if our assumptions were right.
If there is less fallout than we are expecting, that would be unambiguous good news for everybody.
If new NAFTA trade pact is ratified, that would be confidence inspiring for business sector.
USD/CAD reaction
USD/CAD is heading towards Monday’s high of 1.3446, as the bulls remain in complete control amid falling oil prices that offset the losses in the US dollar across the board.
At the moment, the spot trades +0.38% at 1.3435.
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.