Governor Tiff Macklem is set to take questions from reporters, offering more detail on the central bank’s thinking. His remarks come after a widely expected decision to leave the policy rate unchanged at 2.25%.
This section below was published at 14:45 GMT to cover the Bank of Canada’s policy announcements and the initial market reaction.
As most market watchers expected, the Bank of Canada (BoC) kept its policy rate at 2.25% on Wednesday. Now all eyes shift to Governor Tiff Macklem’s upcoming press conference at 15:30 GMT, where investors will be looking for clues on what comes next.
BoC policy statement key highlights
The BoC reiterates that the current rate is at about the right level to keep inflation close to 2% as long as the economy and inflation evolve in line with projections.
BoC reiterates that if the outlook changes, it is prepared to respond.
CPI inflation will remain close to the 2% target as economic slack roughly offsets cost pressures linked to trade reconfiguration.
Underlying inflation is still around 2.5%.
Q4 GDP growth is likely to be weak; final domestic demand will grow in Q4 but will be offset by a decline in net exports.
The Canadian labour market is showing some signs of improvement.
Q3 GDP growth in Canada was surprisingly strong, largely reflecting trade volatility.
Market reaction
The Canadian Dollar (CAD) trades with decent losses on Wednesday, prompting USD/CAD to advance to weekly highs around 1.3860 in the wake of the BoC’s interest rate decision.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | -0.21% | -0.27% | 0.08% | 0.02% | 0.00% | -0.38% | |
| EUR | 0.12% | -0.09% | -0.16% | 0.20% | 0.14% | 0.12% | -0.26% | |
| GBP | 0.21% | 0.09% | -0.06% | 0.29% | 0.23% | 0.22% | -0.17% | |
| JPY | 0.27% | 0.16% | 0.06% | 0.36% | 0.30% | 0.28% | -0.10% | |
| CAD | -0.08% | -0.20% | -0.29% | -0.36% | -0.06% | -0.08% | -0.46% | |
| AUD | -0.02% | -0.14% | -0.23% | -0.30% | 0.06% | -0.01% | -0.40% | |
| NZD | -0.01% | -0.12% | -0.22% | -0.28% | 0.08% | 0.00% | -0.39% | |
| CHF | 0.38% | 0.26% | 0.17% | 0.10% | 0.46% | 0.40% | 0.39% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
This section below was published as a preview of the Bank of Canada’s (BoC) monetary policy announcements at 10:00 GMT.
The Bank of Canada is expected to keep its interest rate at 2.25%.
- The Canadian Dollar remains firm, dragging USD/CAD to multi-week lows.
- The BoC reduced its policy rate by a quarter-point in late October.
- The BoC could start hiking rates by mid-2026.
The Bank of Canada (BoC) is widely expected to maintain its benchmark interest rate at 2.25% at its meeting on Wednesday. That would follow two consecutive quarter-point rate cuts in September and October.
Indeed, the central bank trimmed its benchmark rate by 25 basis points in late October, exactly what everyone was expecting.
Furthermore, policymakers signalled they’re pretty comfortable with where rates are now: low enough to support the economy as it adjusts to the fallout from the US-driven trade tensions, but still tight enough to keep inflation hovering around target.
The issue of inflation continues to persist: Headline CPI deflated to 2.2% YoY in October, while the core CPI climbed to 2.9%. The BoC’s preferred measures, Common, Trimmed, and Median CPI, eased a tad, although they remain comfortably above the target at 2.7%, 3.0%, and 2.9%, respectively.
Previewing the BoC’s interest rate decision, analysts at the National Bank of Canada (NBC) noted, “The Bank of Canada is set to leave its policy rate unchanged at 2.25%, after declaring in October that it is ‘at about the right level’ to keep inflation near target and help the economy through a structural adjustment.”
When will the BoC release its monetary policy decision, and how could it affect USD/CAD?
The Bank of Canada will announce its policy decision on Wednesday at 14:45 GMT, followed by a press conference with Governor Tiff Macklem at 15:30 GMT.
Markets anticipate the central bank to maintain its current stance, with a projected tightening of approximately 33 basis points by the end of 2026.
Pablo Piovano, Senior Analyst at FXStreet, points out that the CAD has been appreciating steadily against the Greenback since the November lows north of 1.4100, sending USD/CAD back to the 1.3800 neighbourhood. He also notes that the technical setup still leans toward further losses if spot keeps the trade below its key 200-day SMA at 1.3904.
From here, Piovano says a return of bullish momentum could send USD/CAD up to test the November high at 1.4140 (November 5), and if that breaks, the next target would be the April ceiling at 1.4414 (April 1).
On the other hand, he highlights initial support at the December base of 1.3799 (December 8), seconded by the September floor at 1.3726 (September 17) and the July valley at 1.3556 (July 3).
“Momentum favours extra declines,” he adds, noting that the Relative Strength Index (RSI) is hovering below the 36 level and the Average Directional Index (ADX) above 26, which hints that the current trend is gathering steam at a firm pace.