Bank of Canada slashes rates, RBA next

David Scutt

Scutt Partners

Bank of Canada slashes rates, RBA next? The Bank of Canada shocked markets overnight, slashing interest rates by 0.25% to 0.75%. In the accompanying monetary policy statement released alongside the rate announcement the Bank noted that the decision was 'in response to the recent sharp drop in oil prices, which will be negative for growth and underlying inflation in Canada', adding 'weaker terms of trade will have an adverse impact on incomes and wealth, reducing domestic demand growth'. With the move completely unexpected the decision had the desired effect with the Canadian Dollar shedding more than 2% against the US Dollar in the period following the announcement. Lower commodity prices driving lower national incomes, disinflationary pressures while your currency remains stubbornly-high? Sound familiar, RBA? (VIEW LINK)

David Scutt
Independent Market Strategist
Scutt Partners

David is a Director of Scutt Partners Pty Ltd and has successfully worked in the financial services markets over the past 12 years with both large and smaller banking groups. He has provided strategic financial analysis for currency and interest...


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