TSX edges higher after Bank of Canada keeps rates unchanged

The S&P  TSX composite index closed up 5.53 points to 16,092.07 after hitting an intraday peak of 16,145.80 a high for the year

The S&P TSX composite index closed up 5.53 points to 16,092.07 after hitting an intraday peak of 16,145.80 a high for the year

Canada's exports declined 3.8 percent in the final month of 2018, nearly entirely on lower exports of energy products, which were down as a result of falling crude oil prices.

As expected - the Bank of Canada left interest rates unchanged as the economy limped past the finish at the end of 2018.

"We expect the BoC to be on hold through the first half of 2019, if not the full year". After growing at a pace of 1.8 per cent in 2018, it now appears that the economy will be weaker in the first half of 2019 than the Bank projected in January.

"Given the mixed picture that the data present, it will take time to gauge the persistence of below-potential growth and the implications for the inflation outlook", said the statement, which explained some of the factors behind the decision.

Dr Lowe spoke several hours before data showed that Australia's economic growth slowed to 0.2 per cent in the December quarter, leading JPMorgan's Sally Auld to pencil in two rate cuts in July and August.

All 25 analysts surveyed by Bloomberg see policy makers leaving the benchmark overnight rate at 1.75 per cent in a decision at 10 a.m.in Ottawa. Further, the greater uncertainty and data dependence highlighted by the Bank of Canada could provide a tailwind for the United States dollars moving forward as the language is priced in to the market's expectation of future rate hikes.

Similarly, they assumed Canada's economy would stumble, but the fall in the fourth quarter was "sharper and more broadly based" than they predicted, the statement said. "We still expect Canadian economic growth to pick up later in the year, supported by ongoing strength in employment and rising wages", she said.

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The Canadian dollar decreased by almost half a cent. Overall exports saw a slight decline and household spending slowed for a second straight quarter.

"Recent data suggest that the slowdown in the global economy has been more pronounced and widespread than the Bank had forecast in its January Monetary Policy Report", said the Bank of Canada, in a news release.

The Canadian dollar weakened to its lowest in more than two months against the greenback on Thursday following a speech from a deputy governor of the Bank of Canada, as investors raised bets that the central bank may cut interest rates this year.

When asked if the central bank was anxious those rules would push unqualified buyers to seek loans on the secondary mortgage market, Patterson said it was to be watched and would be a concern "if that part of the market becomes too large".

"It is clear that global economic prospects would be buoyed by the resolution of trade conflicts", said the bank.

The bank's measures of core inflation remain stable and very close to the 2 percent target even as official inflation fell to 1.4 percent in January because of lower gas prices. Meanwhile, progress in U.S.

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