by Mike ‘Mish’ Shedlock
Despite having a massive property bubble, the Bank of Canada discussed cutting rates on Wednesday to stimulate the economy.
A rate cutting move is even more likely now, as retail sales unexpectedly fell 0.1% in August vs. an expected gain of 0.3%.
In response, the Loonie Plunges to Lowest Level Since March.
The loonie is on pace for the biggest weekly decline since May as the data add to concern about Canada’s economy. The slump began Wednesday when Bank of Canada Governor Stephen Poloz said that officials “actively” discussed the possibility of adding more stimulus into the economy.’
“So now we know why the BOC considered easing,” said Greg Anderson, global head of foreign-exchange strategy in New York at Bank of Montreal. “Economic growth in the third quarter doesn’t look as good as expected, inflation is below target and it’s unclear where an acceleration would come from.”