BOC’s Poloz tips the CAD further by saying rates may stay low for longer

Comments from Bank of Canada governor Stephen Poloz 18 April 2018

Rates may need to stay below the neutral range
Canada has made considerable progress in last 12 months
Some progress has been made on the key issues being watched closely by Governing Council, particularly the dynamics of inflation and wage growth.
Governing Council will remain cautious with respect to future policy adjustments, guided by incoming data
Assuming our forecast remains on track, it is Governing Council’s view that interest rates will need to move higher over time to keep inflation on target
This is an intensely data dependent process of risk management
Rates may need to stay below the neutral range until various forces have dissipated
Increase in inflation has made us quite comfortable with our outlook
There are questions on wages still
By law of gravity, rates will move higher in time (I guess gravity works differently in Canada)
The pace of rate hikes is a considerable question mark
StatsCan will start issuing monthly service trade data later this year

Poloz finishes and USDCAD trades at 1.2636.

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