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Another central bank rises its key rate

USDCAD News by Newsroom on 10:23 January 17, 2018 EST

The Bank of Canada hiked overnight rates by a +25 bps to +1.25% on Wednesday on the back of robust employment data and a pickup in inflation.

The BoC signalled a “gradual, cautious approach to further rate increases, warning uncertainty tied to the future of the North American Free Trade Agreement (NAFTA) is likely to exert a drag on growth.

“Recent data have been strong, inflation is close to target and the economy is operating roughly at capacity,” the Bank of Canada said in a statement. “However, the uncertainty surrounding the future of Nafta is clouding the economic outlook.”

The CAD remains broadly within the range prior to the announcement though volatility picked up shortly before the news release.