The BoC's Governing Council made a decision to maintain overnight rates at 1.75% with a dovish twist in the commentary.
The Fed, which lowered its rate to sustain the US economic expansion, now has a benchmark with a range between 1.5 per cent and 1.75 per cent, bringing it below the Bank of Canada's rate.
The Bank of Canada might have have cut interest rates this week if it was confident we wouldn't go on another debt binge.
The Bank of Canada is keeping its key interest rate on hold in a decision that positions the country as an exception among advanced economies already responding to the weakening world economy. The jobless rate is about as low as it's ever been, and wages this year have accelerated to an annual growth rate of around three per cent, a pace the central bank associates with a healthy economy. -China trade war into his decision to leave Canadian interest rates where they now are.
US crude oil futures were little changed at $55.53 a barrel, held back by worries about a possible delay in resolving the U.S.
There has also been speculation that the BoC would follow in the footsteps of the Federal Reserve, the US central bank, which has cut its rate twice this year after not having done so in more than a decade. The Bank of Canada sees exports and investment contracting temporarily in the near term due to weaker demand, uncertainty and the transportation constraints that continue to limit shipments of Alberta oil. "It will pay close attention to the sources of resilience in the Canadian economy - notably consumer spending and housing activity - as well as to fiscal policy developments".
"In considering the appropriate path for monetary policy, the bank will be monitoring the extent to which the global slowdown spreads beyond manufacturing and investment", the statement said. Still, global growth is expected to slow to around 3 percent this year before edging up over the next two years.
Shares of the Royal Bank of Canada (RY.T) rose 0.4%, while Bank of Montreal (BMO.T) gained 0.7%. Commodity prices have fallen amid concerns about global demand.
"The Canadian dollar has been relatively stable in its primary exchange, which is against the USA dollar".
The overnight rate is the interest rate at which major financial institutions borrow and lend one-day (or "overnight") funds among themselves; the Bank sets a target level for that rate. The housing market rebounded from a swoon at the start of the year, supported by lower mortgage rates, employment growth and immigration.
"It's a pretty hard adjustment, but we're happy to see that at least on the wage side that wage growth picked up overall in Canada and wage growth in those particular regions has has also picked up to kind of meet the Canadian average".