- Bank of Canada kept its key rate steady at 1.75% as expected.
- BoC cut 2020 growth forecast to 1.7% from 1.9% and 2021 forecast to 1.8% from 2.0%.
In a widely expected decision, the Bank of Canada on Wednesday announced that it left the policy rate steady at 1.75% at its October policy meeting. At 15:15 GMT, BoC Governor Poloz will be delivering his remarks on the policy outlook in a press conference.
With the initial market reaction, the USD/CAD pair rose above the 1.31 handle and was last seen trading at 1.3107, adding 0.17% on the day. Below are some key takeaways from the policy statement, via Reuters.
"Canadian H2 growth expected to slow to a rate below potential due to trade uncertainty, continuing adjustment in the energy sector, and unwinding of temporary factors that boosted Q2 growth."
"In considering appropriate path for monetary policy, bank will monitor the extent to which global slowdown spreads beyond manufacturing and investment."
"Forecast for 2019 real GDP Canadian growth revised to 1.5% from 1.3% in July, cuts 2020 forecast to 1.7% from 1.9% and 2021 forecast to 1.8% from 2.0%."
"Global growth expected to slow to below 3% this year - the weakest pace since 2007-2009 financial crisis - before edging up over the next two years."
"Will pay close attention to sources of resilience in canadian economy like consumer spending and housing activity; trade policy risk is two-sided but tilted to downside."
"Canadian employment shows continuing strength and wage growth increasing, with some regional variation; consumer spending choppy but will be supported by income growth; housing activity picking up in most markets."
"Estimates tariffs and trade uncertainty would cut about 1.3% from global GDP (July estimate was 0.8% drop) and 2.0% from canadian gdp (1.6% in july) by end-2021 in absence of monetary policy actions."
"Business investment and exports likely to contract in H2 2019 before expanding again in 2020 and 2021."
"CPI inflation likely to dip temporarily in 2020 as effect of previous energy price spike fades; expects inflation to track to close to 2% target over projection horizon."
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