Bank of Canada Holds Rates Amid Ongoing Trade Uncertainty

The Bank of Canada maintained its policy rate at 2.25%, as expected, but highlighted an uncertain economic environment due to ongoing trade and geopolitical tensions.

The Canadian Dollar (CAD) strengthened against the US Dollar (USD), with the USD/CAD falling to around 1.3875 on Wednesday, a 0.15% decline on the day.

The central bank noted that while demand for labor remains subdued and excess supply in the economy persists, upside risks to inflation have increased, adding to uncertainty surrounding the growth outlook.

Bank of Canada Governor Tiff Macklem's press conference will be closely watched for clues on whether the current policy rate is sufficient or if further adjustments may be necessary.