TORONTO (Reuters) -The Bank of Canada on Wednesday held its benchmark interest rate at 2.75%.
MARKET REACTION: The loonie was trading 0.3% lower at 1.3815 per U.S. dollar, or 72.39 U.S. cents, as the greenback notched broad-based gains.
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COMMENTS
NICK REES, SENIOR FX MARKET ANALYST AT MONEX EUROPE LTD
“While this latest decision to leave rates unchanged was as expected, the BoC retains an easing bias in its most recent set of communications. Any decision to resume cutting, however, is once again seemingly predicated on the Governing Council gaining more clarity over an uncertain outlook, suggesting to us that further rate cuts may be some time away yet. Bearing all that in mind, it is unsurprising to see the loonie treading water ahead of Governor Macklem’s press conference.”
DOUG PORTER, CHIEF ECONOMIST AT BMO CAPITAL MARKETS
“I actually thought there was a bone thrown to the doves, here. You know, they’ve certainly kept the door open to the possibility of further rate cuts if inflation moderates or the economy weakens.”
ANDREW KELVIN, HEAD OF CANADIAN AND GLOBAL RATES STRATEGY AT TD SECURITIES
“The Bank of Canada is very wisely trying to leave as many options on the table here. Rather having just one scenario, they are opting for multiple scenarios.
“What is very clear to me is that they are not willing to declare that the worst is precisely over here. There are some notes of caution despite the strong jobs numbers. They’re not panicking, obviously, nor are they convinced that the economy is out of danger, and they’re just trying to take a balanced approach as a result.”
(Reporting by Fergal Smith, Nivedita Balu and Anna Mehler Paperny; Editing by Frank McGurty)
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