Bank of Canada raises interest rate to 1.25% vs 1.00% prior

Highlights from the Bank of Canada monetary policy announcement 17 January 2018

USDCAD went on a weild ride to 1.2521 then down to 1.2378.

Data has been strong and the economy is operating roughly at capacity
Outlook expected to warrant higher rates over time but some continued policy accommodation will likely be needed to keep economy close to potential and inflation on target
Will remain cautious in considering future policy adjustments
BoC: near-term inflation to fluctuate due to temporary factors
BoC: inflation to remain close to 2% target over projection horizon
BoC: higher oil prices benefit Canada less than elsewhere (due to price spreads)
BoC projects 3.5% global GDP growth over projection horizon

A fairly neutral statement and USDCAD has responded in typical ‘priced in’ fashion by edging higher since the hike. Take out the wild 1.2521/1.2378 swing and we’re buying the fact after selling the rumour 1.2485 trades. Over to the presser next which can be found live on our home page.