Bank of Canada Holds Rate
The Bank of Canada had no surprises up its sleeve, as it maintained the benchmark rate at 1.75% at its monthly policy meeting on Wednesday. The rate statement was positive, which helped boost the Canadian dollar. The bank said that there was “nascent evidence that the global economy is stabilizing” and that recession concerns had eased. Despite the somewhat optimistic rate statement, the economy is expected to slow to 1.3% in Q3, a much weaker figure than the robust clip of 3.7% in Q2. The global trade war continues to take a toll on exports and business investment, and high levels of household debt is likely to constrain consumer spending. The BoC hinted that it is leaving the door open to further rate cuts next year, with the U.S-China trade war continuing to pose a downside risk to the Canadian economy.
