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☆ Canadian dollar hits 2-month low after surprise jobs loss
▼ + stars: | 2023-08-04 | by ( Fergal Smith | ) www.reuters.com time to read: +2 min

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. For the week, the risk-sensitive currency was down 0.9%, its third straight weekly decline, as a jump in long-term bond yields rattled equity market investors. The Canadian economy shed 6,400 jobs in July, missing estimates for a gain of 21,100, while the jobless rate ticked up to 5.5%. Money markets see chances of another Bank of Canada rate hike this year at about 50%, down from 80% before the jobs report. Canadian government bond yields fell across the curve.

Persons: Mark Blinch, Jay Zhao, Murray, Fergal Smith, Grant McCool Organizations: REUTERS, greenback, Canadian, U.S, Bank of Canada, Monex Canada, Canada, U.S ., Thomson Locations: Toronto, TORONTO

☆ Bank of Canada seen hiking rates quarter point to tame stubborn inflation
▼ + stars: | 2023-07-10 | by ( Steve Scherer | ) www.reuters.com time to read: +2 min

In June, the central bank raised its overnight rate to a 22-year high of 4.75% after a five-month pause, saying monetary policy was not restrictive enough. Data in the past month showed some signs of a slowdown - inflation cooling to 3.4%, a tepid May jobs report and a surprise trade deficit in May. "We expect the BoC to take the policy rate 25 basis points higher to 5%." Twenty of 24 economists surveyed by Reuters expect the bank to lift rates by another quarter-point and then hold well into 2024. Reporting by Steve Scherer, additional reporting by Fergal Smith; Editing by David GregorioOur Standards: The Thomson Reuters Trust Principles.

Persons: Jay Zhao, Murray, Andrew Grantham, Steve Scherer, Fergal Smith, David Gregorio Our Organizations: OTTAWA, Bank of Canada, BoC, Monex, Reuters, CIBC Capital Markets, Thomson Locations: Canada

☆ Analysis: Strong economy puts Bank of Canada's 4-month rate hike pause in doubt
▼ + stars: | 2023-06-05 | by ( Steve Scherer | ) www.reuters.com time to read: +4 min

Inflation, which peaked at 8.1% last year, accelerated for the first time in 10 months in April to 4.4%, more than double the Bank of Canada's 2% target. The recent recovery in Canada's housing market is also putting pressure on prices, analysts say. "The Bank of Canada's penchant for surprising traders means that nothing can be ruled out," said Royce Mendes, head of macro strategy at Desjardins Group. Mendes said there could be more than one rate hike in the cards, and Canadians should "brace themselves for a further tightening in financial conditions this summer". "The latest round of data adds weight to our view that the Bank will need to conduct an insurance rate hike at either of its next two meetings," said Jay Zhao-Murray, FX analyst at Monex Canada.

Persons: Stephen Brown, Royce Mendes, Mendes, Macklem, Jay Zhao, Murray, Steve Scherer, Fergal Smith, Denny Thomas, Daniel Wallis Organizations: OTTAWA, Bank of Canada, BoC, Bank of Canada's, North, Capital Economics, Reuters, Federal Reserve, Desjardins Group, Monex Canada, Thomson Locations: North America, United States, States

☆ Bank of Canada seen holding on rates amid cooling inflation, financial turmoil
▼ + stars: | 2023-04-12 | by ( Steve Scherer | ) www.reuters.com time to read: +3 min

[1/2] Governor of the Bank of Canada Tiff Macklem walks outside the Bank of Canada building in Ottawa, Ontario, Canada June 22, 2020. Last month the Bank of Canada became the world's first major central bank to pause its tightening campaign, leaving its benchmark rate at 4.50%. However, bank failures in the United States and Europe have put central bankers on guard against a widespread credit crunch. All 33 economists polled by Reuters agree that the Bank of Canada (BoC) will hold its key overnight rate steady. "Hiking in this environment would put markets on high alert," said Jay Zhao-Murray, FX Market Analyst at Monex Canada, in a note.

☆ Bank of Canada and Fed head for historic divergence, in a blow to loonie
▼ + stars: | 2023-03-09 | by ( Fergal Smith | ) www.reuters.com time to read: +3 min

[1/2] A sign is pictured outside the Bank of Canada building in Ottawa, Ontario, Canada, May 23, 2017. A lower expected peak for Canadian rates has pressured the Canadian dollar against its U.S. counterpart. ,Canadian rates have peaked below U.S. rates in the three major tightening cycles since the start of the millennium, with the gap ranging between 50 and 75 basis points. "Poring over the national accounts, it's increasingly clear that interest-sensitive demand has wilted in Canada," Warren Lovely and Taylor Schleich, strategists at National Bank of Canada, said in a note after the recent GDP data. Still, there could be a limit to how much interest-rate divergence the BoC will allow, say analysts.

☆ Bank of Canada seen leaving rates unchanged as growth stalls
▼ + stars: | 2023-03-08 | by ( Steve Scherer | ) www.reuters.com time to read: +3 min

[1/2] Bank of Canada Governor Tiff Macklem holds a news conference at the Bank of Canada, amid the coronavirus disease (COVID-19) outbreak, in Ottawa, Canada, June 22, 2020. "We expect the Bank of Canada to be the first G10 central bank to hold rates," said Jay Zhao-Murray, a forex analyst at Monex Canada. Money markets expect the policy rate to be left on hold on Wednesday but are pricing in another tightening by September. "Look for the Bank of Canada to point to slowing GDP growth and inflation when justifying its decision to maintain the level of rates," said Royce Mendes and Tiago Figueiredo, Desjardins economists, in a note. "The central bank is unlikely to do much to endorse the view that further rate hikes will be necessary," they said.

☆ Canadian dollar seen higher as analysts eye peak interest rates: Reuters poll
▼ + stars: | 2022-12-07 | by ( Fergal Smith | ) www.reuters.com time to read: +2 min

The loonie has weakened over 7% against the U.S. dollar since the start of 2022, with almost all of the decline coming since mid-August. Canada's economy grew at an annualized rate of 2.9% in the third quarter, much stronger than both analysts and the Bank of Canada were expecting. The BoC has raised its benchmark interest rate by 350 basis points since March to 3.75%, its highest level since 2008, in an attempt to cool inflation. Along with a more stable path for U.S. interest rates it "should help the loonie rally closer to fair value," Zhao-Murray said. Measures of fair value include purchasing power parity (PPP), or the exchange rate that equalizes the purchasing power of separate currencies.

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