The Bank of Canada has cut their benchmark lending rate by 25 points to 0.25 % In a bold step they have also announced that this rate “can be expected” to stay at this level until end Q2 2010. They also revise down their growth forecasts for 2009 to -3% from -1.2 and for 2010 to 2.5 % from 3.8%. On inflation they expect Core inflation to trough at -0.8 % in Q3 up a tad from their earlier -1% estimate. As for Q/E they will provide a framework on Thursday but they won’t commit to immediate action.
Usd/Cad on a charge at the moment above 1.2485. 1.2500 has capped the rally so far, but another test looks likely.
