FXStreet (Edinburgh) – Derek Halpenny, European Head of GMR at BTMU, expects the BoC to keep the cautious tone at today’s meeting.
Key Quotes
“The BOC is expecting the economy to start recovering after flat growth in Q1 and continues to be mindful of downside risks related to the energy sector”.
“As stated above, the BOC will no doubt be somewhat encouraged by the fact that oil prices remain stable despite the renewed strength of the US dollar over the past week”.
“Inflation in Canada, like in the US, shows limited disinflation in the core and the BOC is likely to continue to take a balanced approach to the inflation risks”.
“Key though is the view that spare capacity in the Canadian economy will not be removed until around the end of 2016 and there seems no reason at this stage to signal any change in that view”.
“There may well be reason for optimism but we suspect the statement today after the monetary policy meeting will reflect caution given the downside risks stemming from the energy sector are still notable”.
“We do not expect the statement to be much of a market mover with USD/CAD taking its direction more from general US dollar sentiment”.
(Market News Provided by FXstreet)