The Bank of Canada forecast a weaker outlook for the domestic economy amid heightened global downside risks, potentially giving itself more leeway to lower borrowing costs. In a decision Wednesday, policy makers kept their current 1.75 per cent policy rate unchanged for an eighth straight meeting, calling the level “appropriate” even as they cut their growth forecasts for the next two years. In its Monetary Report it notes that a healthy labor market and the recent turnaround in housing are supporting the Canadian economy despite global trade conflicts and the related uncertainty which have dampened business investment (particularly in the energy sector) and export activities. But the impact on growth of both global headwinds and energy transportation constraints is expected to diminish, and the pace of economic expansion should gradually pick up in 2020 and 2021.
The U.S. Federal Reserve will likely announce a 25 basis point cut today at 11:00 am PST, however analysts are firmly divided as to whether there will be another one. Expect a narrow range till the Fed’s announcement.
Currently Close Range
USDCAD 1.3175 1.3087 1.3075-1.3177
EURCAD 1.4653 1.4542 1.4529-1.4654
GBPCAD 1.6967 1.6835 1.6830-1.6969