Status quo for the Bank of Canada
The Bank of Canada opted to hold steady on its key rate yesterday, as expected by most observers. Although the institution left the rate at 0.50%, it was acknowledged that uncertainty related to growth in China represents a concern for Canada. However, a number of mitigating factors, such as the strength of the Canadian job market and the vigour of the U.S. economy, led the BoC to stand pat. What’s more, it was noted that the export sector appears to be gathering strength, a sign that the economy may be starting to feel the benefits of a weak loonie. In short, the message from Ottawa was far less negative than in July, although the central bank was careful not to rule out any other stimulus measures, stressing that Canada still faces major challenges.
Further to the announcement, the loonie briefly rose against the greenback before running out of steam, probably influenced by another drop in the price of crude oil.
