Today’s decision of the Bank of Canada (Boc) promises to be very exciting. If the Canada Bank will cut the interest rates again or wait until its next meeting at the end of July is not a definitive conclusion, says Carsten Fritsch, commerzbank raw material analyst.
The body will probably benefit from rates the decision
“The arguments in favor of another rate cut include the fact that the labor market is in a difficult position, the general inflation rate has recently fallen below 2% year -on -year and the advanced indicators show that Canada is experiencing a more negative effect of US commercial policy than any other country. This occurs at a time when Canada is already experiencing a weak growth of productivity.”
“On the contrary, there are also convincing reasons for a pause. Unlike the general rate, the underlying rate has recently rise above 3% year -on -year, and the BOC can see this as a more precise reflection of the underlying inflationary pressure. In addition, the Central Bank has cut interest rates at 225 basic points in a year and the key interest rate is now close to the expansive range. Policies can wish to wait and observe the effects of rates cuts before making more changes.
“It is likely that it is an adjusted decision, with the market even valuing a residual probability of a rate cut today, and with the Bloomberg survey recently bowing towards rates without changes. We also consider that interest rates without changes are the most likely scenario, but we must not forget that the Canada bank is prone to surprises. If it remains today, it is probable that the CAD is probable. They will then be at the July meeting. “
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
