BoC Deputy Governor Timothy Lane said in a speech enduring uncertainty of US-China trade relations has “already done some damage” to the global and Canadian economy. But “Canada also has notable strengths, and inflation remains on target”. He added, “Our strong labour market points to sources of growth, such as computer system design and other professional services, education, health care and financial services. It is because of this strength amid the turmoil that we say Canada is resilient, although it is not immune.”

Lane also noted Fed has cut interest rate three times this year. But he emphasized “There is no reason for the Bank of Canada to move in step with the Fed. On the contrary, the experience of the past decade shows that Canada and the United States have followed different roads, reflecting differences in our economic conditions.”

The comments reinforced the message from yesterday’s BoC statement. That is, the central is on hold, with a neutral bias.

BoC kept overnight rate unchanged at 1.75% as widely expected. Canadian Dollar jumps as the central bank sounds more upbeat than in October. Most notably, in the accompanying statement, the language regarding resilience of Canada’s economy being tested was removed. Also, the monitoring of global slowdown spreading beyond investment was omitted.

Instead, BoC concluded today by saying “Based on developments since October, Governing Council judges it appropriate to maintain the current level of the overnight rate target. Future interest rate decisions will be guided by the Bank’s continuing assessment of the adverse impact of trade conflicts against the sources of resilience in the Canadian economy – notably consumer spending and housing activity. Fiscal policy developments will also figure into the Bank’s updated outlook in January..”

Back in October, BoC said, “All things considered, Governing Council judges it appropriate to maintain the current level of the overnight rate target. Governing Council is mindful that the resilience of Canada’s economy will be increasingly tested as trade conflicts and uncertainty persist. In considering the appropriate path for monetary policy, the Bank will be monitoring the extent to which the global slowdown spreads beyond manufacturing and investment. In this context, it will pay close attention to the sources of resilience in the Canadian economy – notably consumer spending and housing activity – as well as to fiscal policy developments.”

Full statement here.