USDCAD Surges To 6 Year Highs As Bank Of Canada Slashes GDP Forecasts, Unexpectedly Cuts Rates
In what seems to have surprised FX trader, Bank of Canada has taken an ax to growth forecasts and rates…
*BOC CUTS CANADA 2015 GDP FORECAST TO 1.1% FROM 1.9%
*BANK OF CANADA CUTS 2Q GDP ESTIMATE TO -0.5% FROM 1.8%
*BOC SEES INCREASED DOWNSIDE RISKS TO CANADIAN INFLATION
*BANK OF CANADA CUTS BENCHMARK INTEREST RATE TO 0.5%
*CANADA OIL AND GAS INVESTMENT TO SHRINK 40% IN 2015, BOC SAYS
*BOC PROJECTIONS ASSUME CANADA DOLLAR AT 80 U.S. CENTS
Furthermore, it warns that “consumer debt vulnerabilities are edging higher” and export weakness is “puzzling.”
USDCAD exploded to 6 year highs..
Full Statement (link):
The Bank of Canada today announced that it is lowering its target for the overnight rate by one-quarter of one percentage point to 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.
Total CPI inflation in Canada has been around 1 per cent in recent months, reflecting year-over-year price declines for consumer energy products. Core inflation has been close to 2 per cent, with disinflationary pressures from economic slack being offset by transitory effects of the past depreciation of the Canadian dollar and some sector-specific factors. Setting aside these transitory effects, the Bank judges that the underlying trend in inflation is about 1.5 to 1.7 per cent.
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