BoC keeps overnight rate target unchanged at 5.00%, aligning with market expectations. In its policy statement, the central bank emphasized its ongoing concern about inflationary risks, stating it “remains prepared to raise the policy rate further if needed.”
Nevertheless, BoC also noted recent data suggesting that the Canadian economy is “no longer in excess demand”. This shift is seen as contributing to a reduction in inflationary pressures across a broad range of goods and services prices. This observation suggests a subtle yet significant change in the economic environment, potentially signaling a pivot in the central bank’s future policy decisions.
USD/CAD is steady after the policy announcement. The focus for the rest of the week will be on whether rebound from 1.3479 could extend through 1.3625 resistance decisively to confirm that whole correction from 1.3897 has completed.
