USD/CAD Drops Below $1.09 as BOC Highlights Exports

Bank of Canada Governor Stephen Poloz extended the country’s interest-rate pause to four years today and remained neutral on his next move, citing slack in the economy that will keep inflation in check.

Policy makers held the benchmark rate on overnight loans between commercial banks at 1 percent and said the recent jump in exports must be sustained before it triggers the business investment needed to bring the economy to full capacity over the next two years. The decision from Ottawa was expected by all 18 economists in a Bloomberg News survey.

The bank “made it abundantly clear that it saw no prospect for a change any time soon,” Avery Shenfeld, chief economist at CIBC World Markets in Toronto, wrote in a research note. “The key message is that the next move in rates could still be up or down, largely because it is seen as distant enough to be uncertain in either timing or direction.”

Bloomberg

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