CAD/BoC – The Bank of Canada raised rates by 100 basis points at its July meeting, its single biggest hike in 24 years. Furthermore, the central bank said more hikes would be needed.
Commenting on their decision, BoC Governor Macklem said: “We had indicated we were prepared to be more forceful. Today was more forceful…Yes, it is a very unusual move to increase by 100 basis points at one decision and that really reflects the very unusual, exceptional circumstances that we find ourselves in.”
NZD/RBNZ – The New Zealand dollar failed to get a lift on Wednesday after the RBNZ hiked rates by 50 basis points as expected and mostly stuck by its commitment to continue tightening policy “at pace”.
Commenting on the meeting and future outlook, Capital Economics stated: “The committee acknowledged that clouds are appearing on the horizon. Our view remains that the ongoing housing downturn will weigh heavily on residential investment and constrain household spending, ultimately forcing the bank to stop hiking once the policy rate reaches 3.5% by year-end.”
Commenting on their decision, BoC Governor Macklem said: “We had indicated we were prepared to be more forceful. Today was more forceful…Yes, it is a very unusual move to increase by 100 basis points at one decision and that really reflects the very unusual, exceptional circumstances that we find ourselves in.”
NZD/RBNZ – The New Zealand dollar failed to get a lift on Wednesday after the RBNZ hiked rates by 50 basis points as expected and mostly stuck by its commitment to continue tightening policy “at pace”.
Commenting on the meeting and future outlook, Capital Economics stated: “The committee acknowledged that clouds are appearing on the horizon. Our view remains that the ongoing housing downturn will weigh heavily on residential investment and constrain household spending, ultimately forcing the bank to stop hiking once the policy rate reaches 3.5% by year-end.”