Loonie Bouncing as Bank of Canada Maintains

Steve Kanaval |

The Loonie is getting a nice pop back above .68 cents versus the $Dollar as the BOC maintains it's benchmark interest rate at .05%. The Bank said the risks to inflation are "roughly balanced", and the "current state of monetary policy is appropriate". Most analysts believe 4Q GDP likely stalled, to delay closing of output gap. The BOC cut GDP forecast to 1.4% from 2%.

As markets swoon and oil continues it downward spiral the Loonie is the bright spot along with positive earnings from Goldman Sachs. The markets are as volatile as we have seen them in many years as 2016 takes perilous turns.

Clearly then action by the Canadian bank to hold on rates makes traders wonder if the same will apply to the US Federal Reserve plan to raise rates in 2016.

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