The Canadian dollar jumped against its US counterpart as the Bank of Canada announced, after deciding to keep the target lending rate unchanged, that it’s expecting the economic growth to resume in the second half of this year.
The BoC announced today that it’s keeping the key overnight rate at 1 per cent. The bank said in its announcement:
The Bank continues to expect that growth will resume in the second half of this year, led by business investment and household expenditures, although lower wealth and incomes will likely moderate the pace of investment and consumption growth. The supply and price of credit to businesses and households remain very stimulative.
Such statement made economists believe that the central bank won’t cut interest rates in the future.
Canada’s Purchasing Managers’ Index, according to Richard Ivey School of Business, jumped from 45.4 in July to 57.6 in August. Analysts predicted a climb to only 46.7. That’s another signal that Canada’s economy is robust enough to survive without additional stimulus.
USD/CAD plunged from 0.9901 to 0.9838 as of 21:29 GMT today. Meanwhile, CAD/JPY slumped from 78.36 to 77.89, but rebounded and traded at 78.45.
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