( CAD )BoC
Interest Rate Decision Overview and Consensus
The Bank of Canada
(BOC) publishes its decision on where to set the benchmark interest
rate. short term interest rates are an important determinant of
currency valuation, A reading that is weaker than forecast is
generally supportive (bullish) for the CAD, while a stronger than
forecast reading is generally negative.
Growing optimism that a
preliminary NAFTA deal is within reach hasn’t spilled over into
expectations for faster Bank of Canada interest rate hikes. Investors
a believe to a chance of 20% chance of a rate increase at the Central
bank's policy by April. A hike isn't fully priced not just yet.
Even if a tentative
deal emerges from the North American Free Trade Agreement, Governor
Stephen Poloz are looking for reasons to be confident the nation can
hold to the higher borrowing costs and will want to wait for a more
cocreate signs in exports and investors before moving again after
three increases since July last year.
Poloz has played the
cautious card for months, Inflation averaged just 1.6 per cent last
year, But Poloz has indicated he’s in no rush to get there,mainly
because, he says, the economy isn’t yet firing on all cylinders.
Even with the unemployment rate at the lowest in four decades, Canada
still has plenty of untapped potential, such as underemployment among
youth and female workers, the governor says. There’s more capacity
that needs to be absorbed and the economy can continue to grow above
potential, he contends.
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