BoC preview: probably on hold- ANZ

By FXStreet FXStreet (Guatemala) – Analysts at ANZ noted that the BoC meeting this week also includes a broader forecast update as part of the new Monetary Policy Report.

Key Quotes:

“While the international outlook has worsened, the domestic economy has begun to finally show signs of improvement in the past few months, and GDP growth looks likely to bounce back in the third quarter after entering a technical recession in 1H2015.”

“We think that may be enough to keep the BoC on hold next week. The uncertain political outlook, particularly if the election result is as close as the current polling suggests, may make a decision to wait and see at the October meeting more prudent, on the margin.”

“Still, with the US growth data moderating of late, risks to the statement language may lean in the dovish direction”

“We see the Bank of Canada as extremely sensitive to the currency, given its importance to the outlook for non-energy exports to help pick up the slack caused by lower energy prices. We would not rule out a more clear reference to the currency in the statement in light of its recent strength.”
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Source:: FX Street