Canadian Overnight Rate Slashed By 50bps
22 April 2008
The Bank of Canada (BoC) has cut its overnight rate by 50 bps today, bringing the effective rate to 3.00%. The BoC indicated that the US economy continues to negatively affect growth in Canada, with the drop in net exports offsetting strong growth in domestic demand. Although the BoC revised its language to reflect a more data-dependent stance in coming meetings, it is widely thought that the bank is still in the middle of its current easing cycle. The US dollar quickly gained almost 1 cent against the Canadian dollar following the announcement before correcting back to levels seen before the news.