Despite practically every other central bank in the developed world looking for ways to further loosen monetary policy, BoC Governor Mark Carney is preparing to increase interest rates. While holding rates steady at 1% this morning, Carney noted that economic expansion is increasing, and stated that he expects momentum to pick up through the end of the year, with inflation to reach target levels sometime in 2013—at which time, he stated, it would be appropriate to gradually withdraw some of the current monetary stimulus measures.
The Loonie is actually mildly weaker this morning as short-covering versus the Sterling and the Greenback, as well as a broad-based euro rally, has created downward pressure on the currency. Given that financial markets are collectively holding their breath until tomorrow’s ECB event, muted activity in currencies, the Loonie included, looks to be the modus operandi for the day. Look to recent historical ranges as a guide for immediate trading needs.
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