Bank of Canada hold rates steady at 1% - USDCAD gets choppy whipsaw

No analysts expected a change in Interest Rates today at 9am EST (2pm GMT) from the Bank of Canada today. Last month there was a rumor that the Bank's Governor Carney would sound dovish and signal rate cuts in 2012, but he did not, thus last time the USDCAD did have a strong move down.

This time there were no such expectations, although there are a few who still expect a cut sometime in the 1st half of 2012 as Australia, norway and sweden cut last month. Canada figures have not been bad but Carney's comments mentioned the situation in Europe, so basically the Bank of Canada remains on hold. Perhaps the slight upward bias on USDCAD (Canadian Dollar weakness) could be attributed to his emphasis on the crisis in Europe

If you look at the Statement Here for Bank of Canada Rate Decision Statement for January 17th 2012

you will notice it really isn't that much different than the Rate Decision Statement for December 2011

What is different was they revised their GDP forecasts while keeping inflation forecasts the same. The last time they gave GDP forecasts were during their October 2011 Rate Decision Statement so although they forecast 2.1 for 2011 it came out at 2.4, so they raised GDP for 2012 from 1.9 to 2.0 but lowered GDP for 2013 from 2.9 to 2.8...so a mixed bag so to speak.

Anyhow here is a 10 second chart of the whipsaw on the USDCAD:

Of course the forex pair had moved down quite a bit overnight, so a bit of a retracement was due. The market was preoccupied with talk of S&P downgrading European Banks after their Downgrades of several European countries on Friday January 13th.