As per expectations
The BOC has kept rates unchanged at 1.25% as per expectations.
However, they did drop reference to being "cautious" on rates.
- Higher rates will be needed to keep inflation near target
- Removes language on need for "monetary policy accommodation"
- Will take a gradual approach to policy adjustment
- Gradual approach will be guided by incoming data
- Will keep assessing economy's sensitivity to rate movements
- will look through transitory impact of gas price changes
- Inflation likely to be a bit higher in the near term
- Goods exports were more robust than forecast
- Housing market continues to adjust, resales soft into 2Q
- Solid wage growth signals housing will pick up in 2018
- Consumption will contribute importantly to 2018 growth
- 1Q activity appears a little stronger than projected.
The USDCAD has moved sharply lower on the changes. The pair is moving below the 200 hour MA now at 1.29049 and below the 50% of the move up from the May 22 low at 1.2894. The low just printed 1.2882. The 200 hour MA will now be eyed as close risk.
