Loonie Tumbles After BOC Keeps Rates On Hold, Signals “Continued Caution”, “Considerable Uncertainty”

Wednesday, December 6, 2017
By Paul Martin

by Tyler Durden
Dec 6, 2017

After two rate hikes earlier in the year, one of which caught traders by surprise, moments ago the Bank of Canada announced that it had kept its rate on hold at 1.00% as expected.

Stateing that “the global economy is evolving largely as expected in the Bank’s October Monetary Policy Report (MPR)” the central bank noted that while in the United States, “growth in the third quarter was stronger than forecast but is still expected to moderate in the months ahead.” It added that “growth has firmed in other advanced economies. Meanwhile, oil prices have moved higher and financial conditions have eased.”

Looking back the data was “in line with October’s outlook, which was for growth to moderate while remaining above potential in the second half of 2017.” Employment growth has been very strong and wages have shown some improvement, supporting robust consumer spending in the third quarter. Business investment continued to contribute to growth after a strong first half, and public infrastructure spending is becoming more evident in the data. Following exceptionally strong growth earlier in 2017, exports declined by more than was expected in the third quarter. However, the latest trade data support the MPR projection that export growth will resume as foreign demand strengthens. Housing has continued to moderate, as expected.

The BOC also noted that it “inflation has been slightly higher than anticipated and will continue to be boosted in the short term by temporary factors, particularly gasoline prices.”

The Rest…HERE

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