Comments from Bank of Canada Governor Agatha Cote:

  • The importance of the lower bound, likelihood of low rates in future suggest consideration should be given to target above 2%
  • Bar for change is high, changing target could be seen as temporary and less credible

A higher target would imply lower rates at the front end but higher rates at the long end so the impact isn’t entirely clear, although I’d tend to lean toward CAD strength because they could lose inflation to the upside.

At this point, it’s basically at the theoretical point so the market isn’t reacting. USD/CAD at 1.1301.