As expected, the Bank of Canada left the interest rate unchanged at 1%. Mark Carney and his colleagues didn’t move this time, but the assessment about Canada’s current situation was good.
In the statement accompanied to the decision, the BOC mentioned the growing worries for the global economy, but also discussed an improvement in the US.
Turning to Canada, the central bank was slightly upbeat about the current situation, while warning about the future:
On balance, recent economic indicators in Canada suggest that growth in the second half of this year is slightly stronger than the Bank projected in October. Household expenditures have more momentum than had been expected and business investment remains solid. Going forward, the weaker external outlook is expected to dampen GDP growth in Canada through financial, confidence and trade channels.
USD/CAD rose towards the 1.02 line prior to the release. Resistance is at 1.0263, followed by 1.03. Support is at 1.01, followed by parity. The pair is now moving down, to 1.0180.
The positive assessment of the current situation in Canada and its No. 1 trade partner, the US, won over the worries for the future.
Earlier, Canada’s building permits leaped by 11.9%, much higher than the early estimate for a rise of 2.3%. In addition, last month’s drop was revised to the upside: from -4.9% to -4.1%.
The next major Canadian indicator is Ivey PMI, a highly regarded gauge of the economy, which is expected to show more growth. See how to trade this event with USD/CAD.
