Bank of Canada Holds Rates at 2.25%, Citing Broadening Recovery and Geopolitical Risks
| Pair | Now | Since publish |
|---|---|---|
| USD/CAD | — | — |
- Bank of Canada holds rates at 2.25% as expected.
- Cites broadening recovery but also geopolitical uncertainties.
- CAD strengthens, with USD/CAD falling 0.15%.
The Bank of Canada (BoC) announced on Wednesday its decision to maintain the target for its overnight rate at 2.25 percent, with the Bank Rate at 2.5 percent and the deposit rate at 2.20 percent. This move was widely anticipated by markets. The central bank’s Governing Council noted a broadening recovery in Canada’s economy and highlighted upside risks to inflation. However, the BoC also emphasized a particularly uncertain economic environment, citing the ongoing conflict in the Middle East, which is keeping energy prices elevated, and the fluid situation surrounding new US tariffs and Canadian counter-measures [STORY_ID: 250d41f0-94ba-46b9-9be7-c0a81ec0d64f, STORY_ID: 7a7e0f9a-ee1f-4fd3-a2ea-bf5aa5ba6c0e]. Following the announcement, the Canadian Dollar (CAD) strengthened against the US Dollar (USD), with USD/CAD falling to approximately 1.3875, a 0.15% decline on the day.