Bank of Canada Holds Overnight Rate Target at 1% - 17.7.2012

The Bank of Canada announced at its rate statement that decided at to keep its Overnight Rate target at 1 per cent. The BOC recognizes that since the April’s Monetary Policy Report the global economic outlook has weakened, Europe’s uncertainty is growing, U.S economy is recovering at a slower pace and emerging markets growth slows down more than anticipated. At the same time BOC reports that domestic economy will keep a modest growth rate and inflation is expected to remain around 2 per cent. Taking into account these factors BOC maintained the interest rate target. The US dollar against the Loonie has been trading in a narrow range since last Friday between the top of the range at 1.0159 and the bottom at 1.0128. During the BOC’s rate statement the FX currency pair was unable to hold previously gains and fell from 1.0152 to 1.0137.