Bank of Canada Maintains 1% Overnight Rate

Posted by Drew Zimmerman

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The bank of Canada has decided to maintain the overnight lending rate at 1%. That was expected, they did however remove their slight hawkish bias and lower thier GDP expectations (added and highlighted below) in their statement.

     In Canada, uncertain global and domestic economic conditions are delaying the pick-up in exports and business investment, leaving the level of economic activity lower than the Bank had been expecting. While household spending remains solid, slower growth of household credit and higher mortgage interest rates point to a gradual unwinding of household imbalances. The Bank expects that a better balance between domestic and foreign demand will be achieved over time and that growth will become more self-sustaining. Real GDP growth is projected to increase from 1.6%(was 1.8%) in 2013 to 2.3% (was 2.7%) in 2014 and 2.6% (was 2.7%) in 2015. The Bank expects that the economy will return gradually to full production capacity, around the end of 2015.

 

On this release the Canadian Dollar futures traded to $96.25, down over 0.75 on the day.

 

Drew Zimmerman

Investment & Commodities/Futures Advisor

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dzimmerman@pifinancial.com