Highlights of the Bank of Canada rate decision:

  • Growth dynamics broadly in line with Oct outlook
  • Global economic growth is evolving "essentially as the BOC had anticipated"
  • US economy growing at solid pace, private domestic demand slightly less robust than expected
  • Labor market has been resilient
  • Inflation in line with Oct outlook
  • Non-resource exports picking up but business investment weighed down by cuts in resource-sector spending
  • Canadian economy continues to undergo "complex and lengthy adjustment" to decline in terms of trade
  • Adjustment process aided by US recovery, lower CAD and earlier BOC cuts
  • Expects Canadian growth to moderate in Q4, move to above potential in 2016
  • Full text
  • Previous forecast for return to full capacity was 'around mid-2017' (no comments in the statement on the output gap)
  • Previously 'Bank judges that the risks around the inflation profile are roughly balanced' (unchanged)

USD/CAD dipped down to 1.3355 then rebounded back to 1.3385.

On the CAD-positive side, the outlook for rates is exactly the same as it was before and they've brushed aside some negatives in exports.

On the negative side, they fret about Q4 growth and the US economy (a bit).