The Bank of Canada published its July 15 hold rationale, outlining inflation and growth risks as USD/CAD remains stable near 1.4100.
The Bank of Canada (BoC) released deliberations behind its July 15 decision to hold rates at 2.25%, coinciding with the Federal Reserve’s upcoming announcement. USD/CAD showed minimal reaction, trading in a tight 30-pip range below 1.4100, slightly lower on the day.
The document revealed policymakers anticipated inflation easing to 2.5% in the second half of 2024, assuming crude oil prices decline. However, they pledged to monitor secondary inflation effects from energy costs, despite recent volatility in oil markets, including a 16% three-session drop in Brent—the steepest since 2020.
Key risks highlighted include upside inflation from Middle East tensions and downside growth from U.S. trade policy. The BoC’s conditional commitment to hold rates reflects balancing these uncertainties, though markets have largely moved past the July decision.