The Bank of Canada didn’t move the rates, but removed the comment regarding no rate hike till the end of Q2. A rate hike in the next meeting looks very probable. USD/CAD is approaching parity once again. Update on this strong currency.
While Mark Carney’s BOC left the main interest rate, the Overnight Rate, unchanged, it removed its own strains regarding a move on the rates. Here’s a quote from the statement, emphasis mine:
"…the Bank also provided exceptional guidance on the likely path of its target rate. This unconventional policy provided considerable additional stimulus during a period of very weak economic conditions and major downside risks to the global and Canadian economies. With recent improvements in the economic outlook, the need for such extraordinary policy is now passing, and it is appropriate to begin to lessen the degree of monetary stimulus."
I read this statement and see a rate hike at the next meeting. The statement explains that the conditions have improved, expressing optimism. In the past, leaving the commitment to keep rates low hurt the loonie. Now the opposite happens.
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