User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Tuesday April 22, 2008 - 17:50:29 GMT
CEP News -

Share This Story:
| | Email

BOC Rate Cut Has Economists Guessing About Next Move

12:10 04/22 (CEP News) Ottawa – The Bank of Canada trimmed another 50 basis points from its key overnight lending rate Tuesday, dropping the rate to an even 3% and leaving economists divided over whether the central bank is nearing the end of its easing cycle.

The BOC cited global financial market turmoil and weakening growth worldwide in announcing its decision, but toned down the wording that it uses to signal that more rate cuts are on the way.

"Some further monetary stimulus will likely be required to achieve the inflation target over the medium term," BOC said in its official statement.

That marked a change from the wording of the previous statement in March, when the bank said further stimulus "is likely required in the near term."

The size of the next cut and when it will come depends on the response of the economy to the rate trimming that has already taken place, the Bank of Canada said Tuesday.

"Given the cumulative reduction in the target for the overnight rate of 150 basis points since last December, the timing of any future monetary stimulus will depend on the evolution of the global economy and domestic demand, and their impact on inflation in Canada," the BOC said.

The tone of the press release was less dovish than last month and hinted that the Bank may be nearly through cutting rates, said BMO deputy chief economist Doug Porter.

The Bank of Canada has moved aggressively, said Porter, and the statement twice noted the cumulative 150 bps of rate cuts to date – a big insurance policy to limit the downside for growth. "While we still look for another modest trim in rates at the next decision date on June 10, that may be the end of the line for rate cuts, especially if credit conditions stabilize," he added.

Ending the credit easing cycle now would be the wrong thing to do, said Laurentian Bank economist Sebastien Lavoie, who added that the global economic slowdown and financial turmoil are far from over. "I don't think they should ease off on the pedal here."

Markets will be confused by the Bank of Canada's statement, he said. The document began by noting that the global economy has weakened, the slowdown in the U.S. is deeper and more protracted than expected and that inflation is under control, Lavoie said. However, the statement suggested the bank may skip a rate cut at its June fixed date, he added. "I find that very surprising. My view is that they should continue to go for it."

The BOC statement "still leaves the door open to further downward adjustments in the policy rate," said RBC senior economist Dawn Desjardins, adding the degree of future easing is likely to be limited. "We look for the bank to lower the overnight rate in June to 2.75% and then look for policy-makers to shift to the sidelines for the remainder of the year."

Scotiabank economist Karen Cordes said she interpreted the Bank of Canada statement as leaving the door open for future cuts, and added that she still expects one more 25 basis point reduction in the overnight rate in June.

For Cordes, the big surprise in the announcement was the fact that the Bank of Canada pushed out the date for inflation to remain under 2% until 2010. "That's in line with our expectations," she said, and signals that, from the central bank's point of view, the fear of rising inflation is "dead until 2010."

Jacqui Douglas, an economics strategist from TD Securities, said that despite the fact the bank softened its stance on possible further stimulus, she thinks it is likely some "cracks will begin to appear" in Canada’s domestic economy before the next rate announcement on June 10 and the Monetary Policy Report in July. “Depending on how the data unfolds, we think that there’s still scope for another 50bp rate cut from the Bank of Canada at the next FAD in June," Douglas added.

In its official statement announcing the rate reduction, the Bank of Canada said growth in the global economy has weakened, reflecting the effects of a sharp slowdown in the U.S. economy and continuing dislocations in global financial markets. "Growth in the Canadian economy has also moderated as buoyant growth in domestic demand, supported by high employment levels and improved terms of trade, has been substantially offset by the fall in net exports," the BOC said.

The BOC added it is now projecting a deeper and more protracted slowdown in the U.S. economy, and that will have "direct consequences for the Canadian economic outlook" with declining exports projected to exert a significant drag on growth throughout 2008. Tightening credit conditions will also squeeze business investment and consumer spending, the bank said.

"Nevertheless, domestic demand is projected to remain strong, supported by firm commodity prices, high employment levels and the effect of cumulative easing in monetary policy," the BOC added.

The central bank said it expects the Canadian economy to grow by 1.4% this year, 2.4% in 2009 and 3.3% in 2010, and move into excess supply in the current fiscal quarter. A gradual U.S. recovery, a return to more normal credit conditions and accommodative monetary policy should generate above-potential growth and bring the economy back into balance “around mid-2010,” the statement said.

Inflation will remain below target this year and next, the bank projects, with both core and total inflation moving back up to 2% in 2010 "as the economy moves back into balance."

The bank said there are both upside and downside risks to its inflation projections, adding that "these risks appear to be balanced."

The Canadian dollar plummeted immediately following the rate decision, dropping almost a full cent to 0.9850 USD. By noon, it had more than recovered its losses and was trading at 0.9974 US.

By Geoff Matthews, [email protected], edited by Nancy Girgis, [email protected]

(END) ©CEP Newswires - ©CEP News Ltd. 2008. All Rights Reserved.

Related recent stories:
(09:00 04/22) Bank of Canada Drops Overnight Target Rate to 3%
(07:36 04/22) Tuesday's Events: BOC Interest Rate Decision, U.S. Existing Home Sales
(18:02 04/21) Market Preview: Loonie and CGBs Unlikely to See Big Moves if BOC Cuts 50 bps


Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Tue 31 July 2018
AA JP- Bank of Japan
A 06:00 DE- Retail Sales
A 09:00 EZ- flash HICP/GDP
AA 12:30 US- Core PCE Deflator
A 14:00 US- CB Consumer Confidence
Wed 1 Aug 2018
A Final Mfg PMIs
AA 12:15 US- ADP Private Payrolls
A 15:00 US- EIA Crude
AA 18:00 US- Federal Reserve Decision
Thu 2 Aug 2018
AA 11:00 GB- Bank of England Decision
A 13:30 US- Weekly Jobless
Fri 3 Aug 2018
A Final Services PMIs
AA 12:30 US- Employment
A 12:30 US/CA- Trade

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105