Bank of Canada April rate decision
- The USDCAD was trading at 1.3443 just before the decision
- The full statement from the BOC
- Abandons bias for higher interest rates
- sees increasing growth of household spending as affects the past policy changes to current housing market fade
- improvement and financial conditions has a positive effect on spending
- residential investment expected to expand modestly in 2020 and 2021 with construction on multi-unit housing picking up
- continues to evaluate degree of monetary policy accommodation as new data arrived
- accommodative policy rate continues to be warranted
- says H1 2019 Canada growth expected to be slower than anticipated but sees growth picking up in H2
- cuts annualized Q4 GDP forecast to 0.4% from 1.3%.Cuts Q1 GDP forecast to 0.3% from 0.8%
- cuts 2019 GDP growth forecast of 1.2% from 1.7%
- inflation near 2% and to remain on target through 2021
- output gap widened in Q1. Expected to narrower over time
- estimates neutral rate between 2.25% and 3.25%
- CPI 2019 Est 1.9% versus 1.7% previously. 2020 Est 2.0% versus 2.0% previously. 2021 Est 2.0%
The USDCAD has moved higher as the central bank abandons rate hike bias amid the economic slowdown. The statement has referenced future increases since the end of 2017. The bank cited slower global growth, sluggish housing and oil sectors. The GDP forecast was caught more than expectations as well.
The USDCAD was trading at 1.3443 just before the decision and is currently at 1.3506 after reaching a high of 1.35199
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