Two things that stand out from the statement; BoC have an optimising growth outlook for both 2016 and 2017; There is no mention of further cuts. Had it not been for the fact that Oil continues to print multi-year lows then the Canadian Dollar may have bounced even higher than it did (also at record lows).
View BoC rate statement
- Inflation evolving broadly as expected
- Expecting inflation to rise to 2% by early 2017
- Global growth is expected to trend upwards beginning in 2016
- Oil prices and other commodities continue to set back Canada
- Q4 GDP expected to soften
- Employment remain resilient and household spending continues to expand
- BoC project growth of 1.5% in 2016 and 2.5% in 2017
- Complex nature of structural adjustments make outlook for demand and output highly uncertain.
- Output gap is closing later than was anticipate in October.
- Risks for profile of inflation are balanced.
- The current stance of monetary policy is appropriate, and the target for the overnight rate remains at 1/2 per cent.
USDCAD appears to be carving out a top but we would also need to see oil prices stabilise to stand any chance of a deeper pullback. Moving averages remain in order and expanding, so this is not a suggestion to short at the highs as you are trading against momentum. However I will be monitoring levels of support for potential buy setups to catch 'phase 1' of the cycle in future.
Bank of Canada maintains overnight rate target at 1/2 per cent
Whilst global markets continue to rumble around fears of global growth, the Bank of Canada released a surprisingly hawkish (esque) statement and kept rates on hold.