BoC likely to be disappointed again – Westpac

By FXStreet Research Team at Westpac, notes that the Bank of Canada cut the overnight rate from 1% to 0.75% in Jan 2015 then spent some months insisting that one was enough.

Key Quotes

“They of course then cut again in July 2015. At this point, crude oil prices were around $55/bbl and the BoC projected growth to pick up soon after, accelerating to above potential in Q4 15.

As it turned out, GDP grew 0.5% y/y in Q4, by which point oil prices had slid to $35. In its Jan 2016 statement, the BoC described renewed oil price weakness as a “setback” for Canada’s economy but still predicted growth would pick up to above potential in Q2 2016. We believe they will again be disappointed.”
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Source:: FX Street