FX: Rose Colored Glasses On, BoC Keeps Rates Unchanged
Bank of Canada Keeps Rates Unchanged
Meanwhile the Bank of Canada left interest rates unchanged at 1.00 percent and adjusted their growth forecasts. For 2012, they expect a “more modest recovery” that will boost GDP growth to 2 percent from a prior forecast of 1.9 percent. They also believe that the economy grew by 2.4 percent last year compared to a prior forecast of 2.1 percent. Even though the BoC predicts a stronger growth this year, the tone of the monetary policy statement wasless optimistic than the previous month. The central bank started off by saying that the outlook for the global economy has deteriorated and uncertainty has increased since their last monetary policy report. The sovereign debt crisis in Europe has intensified and measures to pare debt around the world will slow growth in Europe and the recovery in the U.S. For this reason, the central bank remains comfortably on hold for the time being and will monitor developments in Europe and North America before making any new decisions.
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