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NewsBreak: Loonie Strengthens After BoC Holds Back From Rate Cut Hints

Published 09/04/2019, 10:09 AM
Updated 09/04/2019, 10:37 AM
© Reuters.

Investing.com -- The Loonie strengthened Wednesday after the Bank of Canada disappointed hopes for a rate cut in the near future. At its first policy meeting since early July, the bank left its interest rate at 1.75%, as expected, but stressed in its policy statement that "Canada’s economy is operating close to potential and inflation is on target."

Key quotes:

  • "Growth in the second quarter was strong and exceeded the Bank’s July expectation, although some of this strength is expected to be temporary."

  • "Business investment contracted sharply after a strong first quarter, amid heightened trade uncertainty. Given this composition of growth, the Bank expects economic activity to slow in the second half of the year."

  • "CPI inflation in July was stronger than expected, largely because of temporary factors. These include higher prices for air travel, mobile phones, and some food items, which are offsetting the effects of lower gasoline prices. Measures of core inflation all remain around 2 percent."

  • USD/CAD was at $1.3278 as of 10:22 AM ET (14:22 GMT), down from $1.3339 before the decision.

  • The Canada 10-year bond yield was at 1.11% vs 1.10% before the decision.

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