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    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. ​




    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. 


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