Bank of Canada interest rate pause continued, with a "clear hiking bias"

<p>The Bank of Canada left its overnight rate unchanged at 5%, although other events overtook the news on it:</p><ul><li><a href="https://www.forexlive.com/news/forexlive-americas-fx-news-wrap-25-oct-20231025/" target="_blank" rel="follow" data-article-link="true">Forexlive Americas FX news wrap 25 Oct: Stocks and bonds move lower. USD higher on the day</a></li></ul><p>Via, RBC, their 'Bottom Line" response, in brief:</p><ul><li>CPI readings still running well above the 2% target, the BoC is firmly focused on getting inflation under control. Slower than expected progress is a concern. But evidence continues to build that interest rates are already restrictive enough to continue to cool the economy, and alleviate price pressures. </li><li>consumers in the coming quarters are expected to further cut spending as more of them contend with rising borrowing costs</li><li>a weaker global economic backdrop is also expected to slow export and investment activities with Canadian businesses, who are already facing tighter financial conditions following a rise in longer-maturity bond yields</li><li>The BoC will be cautious about starting to ease off the monetary policy brakes too quickly – we expect the overnight rate will be held at 5% through the first half of next year, with modest rate cuts to follow starting in Q3 2024.</li></ul><p>USD/CAD update:</p>

This article was written by Eamonn Sheridan at www.forexlive.com.