CAD: BOC maintains cautious stance – BBH

According to Brown Brothers Harriman (BBH), the Bank of Canada has kept the policy rate unchanged at 2.25% for the second consecutive meeting, adopting a more cautious tone. The report indicates that uncertainty is heightened, which suggests the BOC is not in a rush to raise rates, with market expectations for a rate hike being pushed further out.

BOC cautious on rate outlook

"USD/CAD broke below its June 2025 low at 1.3540. BOC delivered on expectations. Yesterday, the BOC left the policy rate unchanged at 2.25% for second straight meeting. The BOC also reiterated its on hold guidance noting that “the current policy rate remains appropriate.”"

"However, the BOC adopted a marginally more cautious tone. The BOC stressed that “uncertainty is heightened” vs. “uncertainty remains elevated” in December. That means the BOC will not be in a rush to start raising the policy rate."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)