Canada holds rate steady, US trade balance widens. | CountingPips Forex & Currency Trading Blog

June 10, 2008 - Forex Economic News

Canada holds rate steady, US trade balance widens.

The Bank of Canada announced its decision to keep its interest rate unchanged at 3.00 percent today. The decision to keep the interest rate unchanged was unexpected as economic forecasts and analysts were predicting a rate cut of 25 basis points after a decline in first quarter GDP. The Bank of Canada cited inflation concerns as the underlying factor against a rate cut as the report stated that, "the balance of risks to the Bank's April projection for inflation in Canada has shifted slightly to the upside." The bank statement noted that if energy prices maintain their current position then cpi inflation may increase above 3 percent which will surpass the bank's target rate of 2 percent. The Canadian dollar responded positively in the forex market and quickly gained ground against most major currencies. The next rate decision for the Bank of Canada is coming on July 15th.

Trade deficit increases.

The United States trade deficit grew more than expected in April according to a release by the Commerce Department today. The U.S. trade deficit reached $60.9 billion in April following a revised deficit of $56.5 billion in March. Market forecasts were expecting a deficit of around $59.6 billion for the month. The U.S. had a total of $155.5 billion worth of exports in April which was an increase of $5.0 billion over March's total. April saw a substantial rise in imports as it totaled $216.4 billion worth of imports compared with $207.1 billion in March for an increase of $9.4 billion for the month.

Tags: canada interest rate, cad, us trade balance, deficit, usd, us economy

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