Select Language

BoC set to leave interest rate unchanged amid what some consider the end of cutting cycle

Breaking news

BoC set to leave interest rate unchanged amid what some consider the end of cutting cycle

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.07.30 18:00
BoC set to leave interest rate unchanged amid what some consider the end of cutting cycle

update 2025.07.30 18:00

  • FXStreet expects the Bank of Canada to maintain unchanged rates on July 30.
  • The Canadian Dollar maintains a positive tone vs. the US Dollar.
  • The July meeting could be the fourth consecutive decision with rates at 2.75%.
  • US tariffs would remain in the spotlight at Governor Macklem's press conference.

As the Bank of Canada (BoC) gets set to issue a new interest rate decision on Wednesday, July 30, there is a growing sense that the cutting cycle might have already ended.

The BoC decided to keep rates steady in June, citing a Canadian economy that is "softer but not sharply weaker" and noting "firmness in recent inflation data." Indeed, the policy rate stands at 2.75%, which remains within the bank's estimated neutral range for interest rates, set between 2.25% and 3.25%.

President Donald Trump's tariff agenda continues to be a significant global influence. Since his January return to the White House, he has dangled a slew of new levies that could ripple through global supply chains, and those threats will likely dominate Governor Tiff Macklem's post‑meeting press conference.

The BoC's Q2 Business Outlook Survey (BOS), out on July 21, indicated that Canadian firms are worried about the worst-case tariff situation but are still hesitant to hire and invest. The BOS revealed that companies' short-term inflation predictions have returned to where they were a year ago, and businesses now see a recession scenario as less likely. Earlier this year, businesses were worried that US tariffs would hurt the economy, but so far the effects have mostly been seen in the steel, aluminium, and vehicle industries.

Consumers are feeling the economy's slowdown in their own pay cheques, the latest Survey of Consumer Expectations shows. With the job market looking softer, more people say they're uneasy about hanging on to their positions. This anxiety is permeating everyday life as households are reported to be tightening their budgets and altering their shopping habits as the trade war noise intensifies. While they don't anticipate a surge in prices in the near future, many express concern that a new set of tariffs could hinder the central bank's ability to control inflation.

Previewing the BoC's interest rate decision, analyst Taylor Schleich at the National Bank of Canada noted, "There's growing momentum around the idea that the easing cycle is over. We disagree, and we don't expect the Governing Council to validate this more hawkish view. Instead, they're likely to keep guidance unchanged, reiterating that they're proceeding carefully and monitoring the same four indicators: export demand; tariff impacts on investment, employment, and spending; inflation; and inflation expectations."

When will the BoC release its monetary policy decision, and how could it affect USD/CAD?

The Bank of Canada will publish its policy decision on Wednesday at 13:45 GMT alongside its Monetary Policy Report (MPR). After that, Governor Tiff Macklem will attend a press conference at 14:30 GMT.

Most economists expect the Bank of Canada (BoC) to keep its policy rate anchored at 2.75% on July 30, extending the pause begun in May and June. The decision arrives as the Canadian Dollar quietly grinds higher, rebounding from winter lows near 1.4800 vs. its American counterpart to the current vicinity of 1.3700.

Pablo Piovano, a Senior Analyst at FXStreet, said that "USD/CAD maintains its rebound from the area of yearly in the 1.3550-1.3540 range. While below its key 200-day Simple Moving Average (SMA) at 1.4038, the bearish scenario is expected to prevail."

"USD/CAD hit a new YTD bottom of 1.3538 on June 16. Once this level is cleared, more losses could go all the way down to the September 2024 floor of 1.3418 (September 25)," Piovano said.

Piovano adds that "on the upside, the pair should run into initial resistance at its June ceiling of 1.3797 set on June 23, prior to the May peak of 1.4015 reached on May 12."

The Relative Strength Index (RSI) has rebounded beyond the 52 level, which means that further upside appears on the cards over a short-term horizon. Piovano ends by saying, "The Average Directional Index (ADX) below 15 also shows that the trend lacks conviction."

Economic Indicator

BoC Monetary Policy Report

A quarterly diagnostic review of the health of the Canadian economy, The Bank of Canada Monetary Policy Report is a study of the Canadian economy, including forecasts for all key metrics, as well as an assessment of future risks. Any changes in this report tend to affect Canadian Dollar (CAD) volatility. If the BoC presents a hawkish outlook, that is seen as bullish for CAD, while a dovish outlook is seen as bearish.

Read more.

Last release: Wed Apr 16, 2025 13:45

Frequency: Monthly

Actual: -

Consensus: -

Previous: -

Source:

Interest rates FAQs

Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.

Higher interest rates generally help strengthen a country's currency as they make it a more attractive place for global investors to park their money.

Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.

The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.


Date

Created

 : 2025.07.30

Update

Last updated

 : 2025.07.30

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

USD/JPY Price Forecast: Slides over 2% on weak US data, tumbles below 147.50

The USD/JPY is set to end the week with losses of 0.18% after a worse-than-expected employment report in the United States (US) opened the gates for safe-haven demand, pushing the Japanese Yen higher.
New
update2025.08.02 06:19

EUR/USD skyrockets as US jobs data triggers Fed rate cut bets

The EUR/USD surges more than 1% on Friday as the Greenback gets battered on a worse-than-expected jobs report in the United States (US), which triggered investors' reaction to price in two interest rate cuts by the Federal Reserve (Fed).
New
update2025.08.02 05:59

Canadian Dollar snaps losing streak on volatile NFP Friday

The Canadian Dollar (CAD) came out on top after a messy US Nonfarm Payrolls (NFP) release shattered global positioning in the US Dollar (USD) on Friday.
New
update2025.08.02 04:50

WTI retreats from $70 peak, tests key support as geopolitical tensions escalate

West Texas Intermediate (WTI) Crude Oil is under pressure heading into the weekend, with the price sliding over 3% on Friday to trade near $66.70, pulling back from its highest level near $70 since June 23, reached on Wednesday.
New
update2025.08.02 04:15

Gold soars as dismal US NFP data and Russia tensions spark safe-haven demand

Gold price rallies more than 1.50% on Friday following the release of a dismal Nonfarm Payrolls (NFP) report in the United States (US), which showed the jobs market is cooling faster than expected.
New
update2025.08.02 03:27

AUD/USD slips despite soft NFP as RBA rate cut bets keep Aussie pressured

The Australian Dollar (AUD) remains under pressure against the US Dollar (USD) on Friday, giving back most of its earlier gains despite broad weakness in the Greenback following a disappointing Nonfarm Payrolls (NFP) data.
New
update2025.08.02 03:25

Dow Jones Industrial Average tries to recover from NFP plunge

The Dow Jones Industrial Average (DJIA) plummeted almost 2% top-to-bottom on Friday, falling over 800 points from Thursday's closing bids at its lowest point.
New
update2025.08.02 03:02

USD/JPY drops below 150 after soft US jobs data - Rabobank

For a number of hours leading to the softer than expected US July labour report, USD/JPY was back to trading above the 150.00 level for the first time since early April, Rabobank's FX analyst Jane Foley reports.
New
update2025.08.02 02:18

Silver rebounds after weak US jobs report fuels Fed rate cut speculation

Silver (XAG/USD) reverses early losses on Friday and climbs back above the $36.50 mark, buoyed by a broad-based sell-off in the US Dollar (USD) after the latest Nonfarm Payrolls (NFP) report surprised to the downside.
New
update2025.08.02 01:32

Fed's Bostic admits Fed is in a "difficult environment" as jobs data flashes warning signs

Federal Reserve (Fed) Bank of Atlanta President Raphael Bostic noted on Friday that the latest round of US Nonfarm Payrolls (NFP) jobs data, including revisions, is certainly cause for rate conversation at the Fed, but inflation metrics are still an ingoing concern, especially as the Trump administr
New
update2025.08.02 00:40

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel