The Governing Council of the Bank of Canada will gather in the middle of the week to deliberate on the effectiveness of its current monetary policy, with a possibility for changing the Overnight rate.
Currently, the primary interest rate in Canada is at 1.75 per cent, and market analysts do not expect the Governing Council to cut further by the end of the year.
During its previous meeting, it was stated that the Canadian economy is performing almost entirely within its full capacity, and the biggest worries for the central bank stemmed from global trade disputes.
“Canada’s economy is operating close to potential and inflation is on target. However, escalating trade conflicts and related uncertainty are taking a toll on the global and Canadian economies. In this context, the current degree of monetary policy stimulus remains appropriate.”
At the same time, inflation in Canada remains at 1.9 per cent, which aligns almost perfectly with the BOC’s target-level. The labour market is exceeding expectations as well, with the unemployment rate falling to 5.5 per cent in September.
Canada Unemployment Rate. Image source: TradingEconomics.com
Meanwhile, the USDCAD pair is currently trading at around 1.30516 and is nearing the crucial support level at 1.30266.
USDCAD 1D Chart. Image source: Trendsharks ©, created with TradingView.com
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