Market news

25 January 2023

Breaking: Bank of Canada hikes policy rate by 25 bps to 4.5% as expected

The Bank of Canada (BoC) announced on Wednesday that it hiked its benchmark interest rate by 25 basis points to 4.5% following the January policy meeting. This decision came in line with the market expectation. 

In its policy statement, the BoC noted that it is likely to hold the rate at this level while assessing the impact of cumulative rate hikes.

Market reaction

With the initial reaction, USD/CAD rose sharply and was last seen rising 0.35% on the day at 1.3415.

Key takeaways from policy statement

"Global growth seen declining from 3.6% in 2022 to 1.9% in 2023; US growth to slow to 2.0% in 2022 and 0.5% in 2023."

"Output gap in Q4 was between 0.50% and 1.50%, down from upwardly revised 0.75% to 1.75% in Q3."

"3-month measures of core inflation have come down, suggesting core inflation has peaked."

"Prepared to increase policy rate further if needed to return inflation to 2% target; continuing the quantitative tightening program."

"There is growing evidence that restrictive economic policy is slowing activity, especially household spending."

"Financial conditions remain restrictive but have eased since October; C$ has been relatively stable vs US$."

"Global inflation remains high and broad-based."

Market Focus

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

Open Demo Account
I understand and accept the Privacy Policy and agree that my name and contact details can be used by TeleTrade to contact me about the information I have selected.
23 International Awards
Have a question?

We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.

Follow us

Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.94% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.

© 2011-2023 Teletrade-DJ International Consulting Ltd

This website is operated by Teletrade-DJ International Consulting Ltd, which is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11. Teletrade-DJ International Consulting Ltd is located at 88, Arch. Makarios Avenue, 2nd floor, Nicosia Cyprus.

The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).

The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.

TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.

Please read our full Terms of Use.

To maximise our visitors' browsing experience, TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies.

Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.94% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Choose your language/location