The Bank of Canada concluded that a more accommodative monetary policy was not needed at this time to address downside risks to the Canadian economy. The Bank of Canada noted the resilience of the Canadian economy in the midst of adverse global developments. They noted in their rate statement the following:
"In considering the appropriate path for monetary policy, the Bank will be monitoring the extent to which the global slowdown spreads beyond manufacturing and investment. In this context, it will pay close attention to the sources of resilience in the Canadian economy - notably consumer spending and housing activity - as well as to fiscal policy developments"
Therefore, watch for any slowdown for data in consumer spending and housing activity to weigh on CAD All in all the statement gave a dovish tilt upgrading the 2019 GDP forecast, but downgrading it for the following two years. Now we have had a hawkish cut from the Fed USDCAD should find buyers on pullbacks for the next 24 hours.
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