Bank of Canada likely to stand pat in December – Wells Fargo

The Bank of Canada is set to meet tomorrow for its bank rate decision. According to a Wells Fargo research report, the Canadian central bank is expected to stand pat in December. In September, the Canadian central bank had surprisingly raised its overnight lending rate by 25 basis points to 1 percent. Real economic growth was particularly strong in Canada in the first half of 2017, averaging over 4 percent annualized rate.

Data released recently indicated that Canada’s real GDP slowing down from the breakneck rate seen through the first half of 2017. Economic growth coming back down might reassure monetary policymakers in Canada that a gradual path of monetary policy tightening is warranted.

As the Bank of Canada’s last policy statement from October emphasized, wage and other data show there is still some slack in the labor market, and household spending is expected to be more sensitive to interest rates than in the past because of high debt levels.

“We do not expect a rate hike at the December meeting and look for the BoC to roughly keep pace with the Fed next year”, added Wells Fargo.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was bullish at 86.2993, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 17.4042. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest