Members recognized chance of inflation stalling but there was a consensus that indicators showed enough progress to warrant a cutMembers agreed that future easing would likely be gradual, timing would depend on data Agreed to emphasize in communications that decisions would be taken one meeting at a timeSome members were more focused on downside risks to finlatio ndue to weak economyOthers put more weight on upside risks related to persistent wage growth and potential for housing market reboundDiscussed many potential drivers that could affect exchange rateDiscussed large number of households renewing mortgages at higher rates in 2025
The ‘gradual’ comment is an interesting one as it goes against market pricing of 64% for another cut in July. That said, the probabilities will swing with upcoming data, including retail sales on Friday and next week’s CPI and GDP reports.
USD/CAD was unmoved on this release and trades at 1.3713 with the US on holiday.
This article was written by Adam Button at www.forexlive.com.
