BOC's Lane: BOC 'paying close attention' to impact of stronger Canadian dollar
BOC's Lane in Saskatoon
- BOC pays close attention to impact of higher interest rates
- Protectionism could lead to lower Canadian potential growth
- Economic data show growth in Canada is becoming more broadly based and self-sustaining
- Seeing widespread strength in business investment, exports, along with global economic expansion
- Trade negotiations could have implications for economy, which we would need to consider
- Watching trade developments very closely
A bit of jawboning from Lane and USD/CAD is quickly up to 1.23. I think the market is overreacting with the 70-pip rally in the pair. The BOC often says it's watching CAD closely.
My takeaway is on trade. The BOC is worried about NAFTA negotiations and potential US trade changes.