All eyes on the U.S. Federal Reserve
The greenback is under slight pressure against other currencies this morning further to the unexpected announcement by the Bank of Japan (BoJ) that it would keep its key rate unchanged at -0.1%. Although it did not close the door to new easing measures, the BoJ most importantly committed to act on the short-term segment of the interest rate curve and to carefully monitor whether its inflation target of 2% is achieved.
Closer to home, Bank of Canada Governor Stephen Poloz stated yesterday that he was disappointed with the performance of our exports and was not ruling out the possibility of reducing his economic growth projections in October. Mr. Poloz also appeared relatively unconcerned about the risk of interprovincial contagion of a slumping real estate sector.
On the topic of projections, the Organization for Economic Co-operation and Development (OECD) has reported that according to its analysis, global growth will struggle to solidify this year and next year, as global economic intensity appears to be at a standstill.
In conclusion, it should be noted that the U.S. Federal Reserve will announce its monetary policy decision this afternoon at 2 p.m. and, even more importantly (let’s hope), could clarify its future intentions.
