Bank of Canada (BoC) Hikes Rates, Loonie Soars

The Bank of Canada raised its policy rate Wednesday to +0.75% from 0.50%, its first increase in seven years, on an improving economic outlook that’s soaking up unused labor and production capacity at a “significant” pace.

USD/CAD down -0.6% to C$1.2834

Comments:

  • BOC: Recent Data Have Bolstered Confidence in Outlook
  • BOC: Canadian Economy “Has Been Robust”
  • BOC: Outlook “Warrants Withdrawal of Some” Monetary Stimulus
  • BOC: Future Rate Decisions to Be Guided By Data
  • BOC: Mindful of Trade-Policy Uncertainty, Financial Stability
  • BOC: “Significant Amount” of Economic Slack Has Been Absorbed
  • BOC: Output Gap to Close By End of 2017
  • BOC: Upgrades 2017 Growth to 2.8%, 2018 Growth to 2%
  • BOC: Forecasts 3% Annualized Growth in 2Q, 2% in 3Q
  • BOC: Growth Becoming More Sustainable; Broadening Across Regions, Sectors
  • BOC: Exports Should Make “Increasing Contribution” to Growth
  • BOC: Softness in CPI Due to Temporary Factors
  • BOC: Expects Inflation to Return “Close” to 2% Target By Mid-2018
  • BOC: Appropriate To Raise Rates Given Lag Between Monetary Policy, Future CPI
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    Dean Popplewell

    Dean Popplewell

    Vice-President of Market Analysis at MarketPulse
    Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
    Dean Popplewell