Governor Tiff Macklem took questions from reporters, offering markets a clearer read on the central bank’s thinking. His remarks came after the widely anticipated decision to leave the policy rate unchanged at 2.25%.
BoC Macklem press conference highlights
If the Iran conflict persists, we could see shifts in the composition of growth.
The impact of the Iran conflict on Canada’s economy will depend on its duration.
We have some time to assess the implications of the Iran conflict.
We will take rate decisions one meeting at a time.
If we start to see core measures go up, that’s a sign inflation is spreading.
We’re getting better at assessing supply shocks.
We put a big focus on high frequency data and near term data.
This section below was published at 13:45 GMT to cover the Bank of Canada’s policy announcements and the initial market reaction.
As widely anticipated, the Bank of Canada (BoC) left its policy rate unchanged at 2.25% on Wednesday. The focus now turns to Governor Tiff Macklem’s press conference at 14:30 GMT, where markets will be looking for further insight into today’s decision and clearer guidance on the policy outlook.
BoC policy statement key highlights
The Bank of Canada held its policy rate at 2.25%.
Recent data suggest near-term Canadian growth will be weaker than anticipated in January.
A sharp increase in gasoline prices will push up total inflation in the coming months.
Risks to growth are tilted to the downside, while inflation risks have increased.
The Middle East conflict will boost global inflation in the near term.
The economic impact of the conflict is highly uncertain and has heightened global risks.
Financial conditions have tightened from previously accommodative levels.
It is too early to assess the impact of the conflict on Canadian growth.
Market reaction
The Canadian Dollar (CAD) trades with modest losses vs. the Greenback on Wednesday, prompting USD/CAD to add to Tuesday’s advance and revisit the 1.3710-1.3720 band in the wake of the bank’s interest rate decision.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.25% | 0.23% | 0.30% | 0.21% | 0.57% | 0.51% | 0.43% | |
| EUR | -0.25% | -0.00% | 0.06% | -0.04% | 0.32% | 0.25% | 0.18% | |
| GBP | -0.23% | 0.00% | 0.06% | -0.04% | 0.33% | 0.25% | 0.17% | |
| JPY | -0.30% | -0.06% | -0.06% | -0.11% | 0.26% | 0.16% | 0.08% | |
| CAD | -0.21% | 0.04% | 0.04% | 0.11% | 0.36% | 0.28% | 0.21% | |
| AUD | -0.57% | -0.32% | -0.33% | -0.26% | -0.36% | -0.07% | -0.20% | |
| NZD | -0.51% | -0.25% | -0.25% | -0.16% | -0.28% | 0.07% | -0.09% | |
| CHF | -0.43% | -0.18% | -0.17% | -0.08% | -0.21% | 0.20% | 0.09% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
This section below was published as a preview of the Bank of Canada’s (BoC) monetary policy announcements at 09:00 GMT.
- The Bank of Canada is expected to keep its interest rate at 2.25%.
- The Canadian Dollar remains weak, with USD/CAD above 1.3700.
- Markets pencil in around 10 bps of hiking by the BoC this year.
The Bank of Canada (BoC) is widely expected to keep its policy rate unchanged at 2.25% at its Wednesday meeting, effectively extending the pause it signalled back in January.
At that meeting, policymakers did exactly that, leaving the policy rate at 2.25%, broadly in line with market expectations. The decision reinforced the bank’s cautious, wait-and-see approach as officials continue to navigate a rather uncertain global backdrop amid the US-Iran war and the Oil supply disruptions through the Strait of Hormuz.
While higher crude prices could add to inflation risks, Canada is also a major Oil exporter, meaning stronger energy prices may support economic growth.
The updated projections also paint a somewhat softer picture for the economy. The economy is still projected to expand, with GDP rising by roughly 1.1% anticipated for 2026. However, the trajectory of that growth appears less robust.
In fact, the bank now sees activity losing momentum toward the end of the forecast horizon, with growth expected to be flat in the fourth quarter.
The inflation picture is looking a bit brighter, as the Consumer Price Index (CPI) is projected to average roughly 2% this year. Furthermore, this slight dip indicates that inflationary pressures are moving toward the bank’s target.
In addition, policymakers kept their estimate of the neutral rate unchanged in the 2.25%-3.25% range.
In his previous press conference, Governor Tiff Macklem cautioned that the changes to US tariffs might be permanent, even hinting that the period of unrestricted, rules-based trade between Canada and the US could be over.
Overall, the BoC’s message is clear: officials appear satisfied with maintaining interest rates at their current levels, at least for now, while closely monitoring the economy’s slower growth and the unpredictable global situation.
Inflation, however, remains the key watch point after the headline CPI edged up to 1.8% YoY in February, falling below the bank’s target for the first time since August 2025. In the same direction, the core inflation eased to 2.3% from a year earlier. The bank’s preferred measures, CPI-Common, Trimmed and Median, also ticked lower, but at 2.4%, 2.3% and 2.3%, respectively, they remain comfortably above target.
Previewing the BoC’s interest rate decision, strategists Molly Schwartz and Christian Lawrence at Rabobank noted, “We expect the Bank of Canada to maintain the overnight policy rate at 2.25% through year-end; however, the market is starting to price the possibility of a hike into the OIS curve.”
When will the BoC release its monetary policy decision, and how could it affect USD/CAD?
The Bank of Canada will announce its policy decision on Wednesday at 13:45 GMT, followed by a press conference with Governor Tiff Macklem at 14:30 GMT.
Markets anticipate the central bank to maintain its current stance, with a projected tightening of approximately 42 basis points by the end of 2026.
Pablo Piovano, Senior Analyst at FXStreet, points out that the Canadian Dollar (CAD) has been depreciating steadily against the Greenback since its monthly troughs in the low 1.3500s, finding some decent resistance around 1.3750 in the last few days.
Piovano says a return of a more convincing bullish momentum could prompt spot to initially reclaim the March top at 1.3752 (March 3), ahead of its key 200-day SMA at 1.3798 and the 2026 ceiling at 1.3928 (January 16). Up from here comes the key 1.4000 threshold, seconded by the November top at 1.4140 (November 5).
On the downside, he adds, “The loss of the March base at 1.3525 (March 9) could put a test of the February valley at 1.3504 (February 11) back into view ahead of the 2026 bottom at 1.3481 (January 30).
“Momentum favours extra gains,” he suggests, noting that the Relative Strength Index (RSI) hovers near the 54 level, although the Average Directional Index (ADX) around 14 is indicative of a pale trend.
