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Bank of Canada: dovish stance

Yesterday’s Bank of Canada meeting has negated all the bullish prospects of the Canadian dollar. The regulator left its overnight target rate at 1%, saying it "judges that the substantial monetary policy stimulus currently in place remains appropriate." There was no indication of removing that stimulus in the foreseeable future."The Bank of Canada has shifted from a hawkish stance to neutral, but sounds fairly dovish in their commentary," Scotiabank analysts say.

What is more, the bank’s economic growth forecast for this year was cut 1.8% to 1.6%. The outlook for 2014 was lowered from 2.7% to 2.3% percent and the 2015 projection trimmed from 2.7% to 2.6%.

Nomura: Finally, the Bank of Canada is catching up with reality. The new growth forecasts brings them in line with what the International Monetary Fund had in October. A bearish correction in the Canadian dollar was needed, and this will help get us there.

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