BoC: Global developments the key to future decisions – RBC CM


After today’s meeting, the Bank of Canada (BoC) kept its interest rate unchanged at 1.75% as most expected. Josh Nye, Senior Economist at RBC Economics Research point out the central bank statement offered no direction regarding future policy moves and he warned that gobal developments hold the key to future decisions.

Key Quotes: 

“Since its July meeting, conversation has shifted from ‘if’ to ‘when’ the BoC will join its many global peers in lowering interest rates. But that evolution wasn’t obvious in today’s policy statement, which was more neutral than expected and lent support to the Canadian dollar.”

“Global developments and their impact on Canada’s economy will receive “particular attention” when the BoC updates its forecasts in October. The combined ½ ppt add to growth from business investment and net trade in its 2020 GDP forecast looks vulnerable to a downward revision.”

 “An economy that is operating close to full capacity (thanks to a surprisingly strong Q2 GDP print), with inflation on target and wage growth picking up, has kept the BoC from committing to a future rate cut (or perhaps it’s Governor Poloz’s reluctance to provide any forward guidance).”

“The bank’s comments on the global outlook suggest the door is open to a rate cut. Our forecast assumes a move in January. We’ve been flagging growing risk of an earlier cut, which has only been diminished slightly by today’s statement.”

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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex News

Editors’ Picks

EUR/USD breaks above 1.1100 amid EU hopes, US-Sino tensiosn

EUR/USD has hit a new two-month high above 1.11, amid hopes for a fiscal boost in Europe, and as growing Sino-American tensions seem to weigh on the dollar for a change. EZ inflation, US data, Trump's China speech, and end-of-month flows are in play.

EUR/USD News

GBP/USD advances amid US dollar weakness, shrugging off concerns

GBP/USD is trading above 1.23, edging higher amid US dollar weakness and Britain's gradual reopening. Intensifying Sino-American tensions and the Brexit impasse are ignored. 

GBP/USD News

Forex Today: Dollar dives, decoupling from stumbling stocks ahead of Trump's Chinese announcement

The US dollar remains on the back foot, with EUR/USD topping 1.11, despite a worsening market mood related to Sno-American relations. President Donald Trump will announce actions against China following Beijing's tightening of its grip on Hong Kong. 

Read more

Gold pokes $1,721/23 resistance area

Gold prices extend the latest recovery from $1,711 as DXY refreshes two-month low. A confluence of 10-day EMA, nine-day-old falling trend line probes immediate upside. An ascending trend line from April 21 favors the bulls.

Gold News

WTI struggles to cheer USD weakness, drops 1.40% in Asia

WTI probes gradual declines from $34.34, still eyes record monthly advances. DXY bears the burden of risk aversion wave before US President Trump’s China conference. Fears of US-China restrict the black gold’s near-term upside.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures