Bank of Canada maintains course
The BoC kept its key rate unchanged at 0.5% yesterday and reiterated that “the economy continues to undergo a complex and lengthy adjustment to the decline in Canada’s terms of trade” and also underscored the growing vulnerability in terms of household spending. National Bank’s team of economists expect the BoC to remain cautious and keep its key rate low for the year to come. The loonie was still able to gain a few points yesterday, approaching weekly lows.
This morning, we will be closely watching the European Central Bank’s decision on its key rate and the size of its quantitative easing program, which almost all observers expect will be expanded. Some pundits are even anticipating a day of extraordinary volatility for the single currency. The EUR/USD pair is trading at its lowest level since March. Definitely an issue to keep an eye on.
