The BOC left the interest rate unchanged at 1.25% as most economists had expected. Markets priced in a 20% chance of a hike. The USD/CAD jumped to a high of 1.2635 as the statement pledged caution regarding raising the interest rates. This was not new but perhaps some had expected a more hawkish tone. In addition, the Canadian Dollar advanced nicely in recent weeks thanks to NAFTA progress and 3-year highs for oil. Perhaps this was an opportunity to take profits.
Bank of Canada Decision
BOC event related news
BOC event related analysis
April BoC meeting preview
The Bank of Canada is likely to leave the interest rate unchanged at 1.25%, but they are quite likely to move markets. The event on April 18th at 14:00 GMT consists of new forecasts and a press conference by Governor Stephen Poloz and Deputy Carolyn Wilkins from 15:15 GMT. The Ottawa-based institution has many things to consider...
The Canadian dollar has posted slight losses in the Wednesday session, erasing the gains seen on Tuesday. Currently, USD/CAD is trading at 1.2584, up 0.26% on the day. In economic news, it’s Rate Day in Ottawa, with the BoC expected to remain on the sidelines. There are no major events in the US, but we’ll hear from FOMC members Williams and Quarles.
This meeting will be accompanied by a new Monetary Policy Report containing the Bank of Canada’s new growth and inflation forecasts. NAFTA remains a key risk but the market seems to be trading as if an agreement is likely to be forthcoming in the coming weeks and this remains our base case.
March BoC meeting review
The Bank of Canada left the interest rate unchanged at 1.25% as widely expected. They do see a path of higher interest rates in the future, leaving the hawkish bias in the last paragraph. Rates are still expected to rise. However, the team led by Poloz elevated their tone about international trade. Without directly mentioning Trump, they said that trade developments are a significant and growing source of uncertainty. This is new language that initially sent the USD/CAD higher but limited the gains.
The Bank of Canada maintained its target for the overnight rate at 1 1/4 per cent at the March 2018 policy meeting. The Bank Rate is correspondingly 1 1/2 per cent and the deposit rate is 1 per cent.
The Canadian Dollar keeps the negative bias vs. the buck on Wednesday, taking USD/CAD to the 1.2935/40 band in the wake of the BoC’s meeting.
What is the BOC?
The Bank of Canada is the nation's central bank. Its principal role is "to promote the economic and financial welfare of Canada," as defined in the Bank of Canada Act. The Bank’s four main areas of responsibility are:
- Monetary policy: The Bank influences the supply of money circulating in the economy, using its monetary policy framework to keep inflation low and stable.
- Financial system: The Bank promotes safe, sound and efficient financial systems, within Canada and internationally, and conducts transactions in financial markets in support of these objectives.
- Currency: The Bank designs, issues and distributes Canada’s bank notes.
- Funds management: The Bank is the "fiscal agent" for the Government of Canada, managing its public debt programs and foreign exchange reserves.
Who is BOC's president?
Stephen S. Poloz was born in Oshawa, Ontario, in 1956. He was appointed Governor of the Bank of Canada, effective 3 June 2013, for a term of seven years. He is the ninth Governor of the Bank of Canada. As Governor, he is also Chairman of the Board of Directors of the Bank and a member of the Board of Directors of the Bank for International Settlements (BIS). He currently chairs both the BIS Audit Committee and the Consultative Council for the Americas.
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the world interest rates table
The World Interest Rates Table reflects the current interest rates of the main countries around the world, set by their respective Central Banks. Rates typically reflect the health of individual economies, as in a perfect scenario, Central Banks tend to rise rates when the economy is growing and therefore instigate inflation.