Why the BOC May Not Announce a Rate Cut Anytime Soon

The likelihood of the Bank of Canada cutting interest rates in the near future are inching lower after the outcome of the recent general elections. Following Justin Trudeau’s victory, there is a higher anticipation among investors for increased fiscal spending and strengthening in the Canadian economy.

The Liberal government has already stated its intention to increase budget deficits by boosting spending in a bid to revive Canada’s economic growth. One of the key issues mentioned in Trudeau’s campaigns concerned his plans to expand the budget deficit to nearly twice as high during the fiscal year 2020.

So far, the BOC has held the benchmark interest rate steady in 2019 as employment rose at a steady pace and inflation held around the bank’s target of 2%. According to a recent survey by the central bank, Canadian businesses expect sales to grow at a moderate pace in 2020 as well, signalling a relatively healthy state of the economy.

Canada has so far remained insulated from the ongoing trade tensions between the US and China that have weighed heavily on leading economies around the world. However, with a partial trade deal imminent and hopes for increased fiscal spending, economic growth is expected to remain supported in the near future, further reducing the need for the BOC to cut interest rates more than once.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
Related Articles
Comments
0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

HFM

Doo Prime

XM

Best Forex Brokers