Brief patch of volatility for the Canadian dollar
The Canadian dollar briefly gained ground after the Bank of Canada (BoC) announced that it would keep its key rate unchanged. Comments from Governor Stephen Poloz during the press conference confirmed the BoC’s dovish position. More specifically, it was Mr. Poloz’s remarks about the possibility of a rate cut, discussed actively at the meeting, which immediately made the loonie reverse course. The BoC also slashed its growth forecasts for the Canadian economy for 2016, 2017 and 2018, citing weak growth in exports and the resale housing market. The BoC does not see the economy reaching full capacity until the second half of 2018.
The Canadian dollar is currently being pulled by two opposing forces: the recent strength of oil (WTI) and the differing monetary policies between the United States (restrictive) and Canada (accommodative).
This morning, we’ll be keeping an eye on the European Central Bank’s interest rate decision, followed at 8:30 by ECB President Mario Draghi’s press conference.
