Bank of Canada maintains course
It came as little surprise when the Bank of Canada announced yesterday that it would keep its key rate at the current 0.5%. However, the BoC’s tone was slightly more upbeat than anticipated, as it still believes that its growth projection of 2.8% for 2016 will be reached despite potentially negative Q2 growth due to the western Canadian forest fires draining 1.25% from quarterly growth. The BoC is betting on a stronger rally in Q3 and Q4 to offset this setback. This news was all it took to help the loonie regain the ground it had lost earlier in the week. Moreover, crude oil also continues to rise, brushing up against the $50/barrel mark overnight and lending further support to the CAD’s gains this morning.
This morning’s economic news will come to us almost exclusively from south of the 49th parallel. The main indicator to watch at 8:30 will be Durable Goods Orders for April. Markets anticipate growth of 0.5%, well below the 1.3% increase seen in March. It remains to be seen whether this news will shore up the USD, which is starting the day down against most of its peers.
