Bank of Canada’s new Governor Tiff Macklem sounded more dovish and more pessimistic about economic recover yesterday than his predecessor. He emphasised that the bank expects supply to recover faster than demand causing downward pressure on inflation. In fact one of his primary concern seemed to be persistently low inflation. He also noted that the Bank expects the recuperation phase to be “bumpy”. There was no indication of an exit strategy from the bond-buying program and he left open the possibility of using other tools where necessary to bring the economy to a more normal state. Meanwhile the US dollar has lost ground across the board as fears of a breakdown of the China trade deal were reversed by US authorities. The Canadian dollar is stronger by 0.2%.
