Canadian Dollar Tumbles as Bank of Canada Voices Unexpected Dovishness It’s always the quiet ones… Little was expected from the Bank of Canada from its policy meeting this past session. The consensus was for a status quo that was optimistic on growth, caution over the housing sector and a view that the next move would be an eventual rate hike. That last part was conspicuously absent however. While the central bank didn’t shift from hawkish to dovish overnight, they did leave out the explicit rhetoric on a need for future rate hikes. Over the past few years, the Canadian dollar lead the rate forecast segment – though not current rates – due to a persistent vow that a hike was in the horizon. That spectrum has shifted and Canada now finds itself in the same position as the Fed. Meanwhile, the growth forecasts for 2013 (1.6 from 1.8 percent) and 2014 (2.3 from 2.7 percent) were lowered; while the expected return to the 2 percent inflation target was pushed out to the fourth quarter of 2015. This is a painful shift for an already second-tier carry.
Posted on: Thu, 24 Oct 2013 06:51:24 +0000
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