The Bank of Canada just released its Policy Rate decision, maintaining rates unchanged for the fourth time since October 2025 and, quite frankly, not hinting at much change in its stance.
The Statement (which you can access here) had nothing particularly surprising, with the Bank noting that the outlook isn’t much different from that indicated in the January Decision.
Some concerns about the Quarterly MPC Projections regarding the economic outlook maintain the Bank’s view of a not-so-strong Canadian economy, which takes some pricing out of rate hikes.
Nonetheless, the BoC assumed a $75 Crude Oil barrel, so if it stays closer to $100 for the next meeting, the Bank should turn more hawkish.
On the Loonie, it yoyo’d quite aggressively throughout the ups and downs of the Middle Eastern war – With WTI Crude bouncing back above $100 just today, the CAD is seeing a two-catalyst recipe for its daily performance; At least against other Major currencies (with USD traders awaiting the FOMC).
Even if the war really settles, the Canadian Dollar should not regain its prior lows, with increased Oil revenues and orders, which would underpin the CAD for the next few months at least – The BoC mentioned this in relation to Oil developments.
“While the war in Iran may alter its composition, overall GDP growth is little changed in the updated forecast: Since Canada is a large net exporter of oil, higher oil prices increase national income even as consumers are squeezed by higher gasoline prices.”
The Press Conference starts very soon, access it here.
Let’s dive right into a two-timeframe USD/CAD analysis.