Bank of Japan's Ueda Flags Low Real Interest Rates as Key Factor in Rate Hike Timing 
RBA Raises Interest Rates to 4.35% Amid Rising Inflation Risks and Middle East Tensions 
Bank of Korea Signals Potential Interest Rate Hikes as Inflation Remains Elevated 
BOJ Rate Decision in Focus as Yen, Inflation, and Nikkei Hang in Balance 
South Korea Central Bank Signals Cautious Policy Amid Inflation and Middle East Tensions 
Paraguay Holds Interest Rate at 5.5% as Inflation Remains Stable Amid Global Uncertainty 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
The Loonie tumbled more than 12% against the USD from the middle of October 2015 through the middle of January 2016 in a more or less one-way move. Import prices are rising on the back of the weaker currency, thus also sending consumer prices higher. Inflation has thus increased markedly since spring 2015 and, at 2%, is now trading exactly at the BoC's target level.
The BoC is likely to have a closer look at the government's 2016 budget plan due to be released on 22 March. A budget which delivers significant fiscal stimulus to boost growth should be CAD-supportive and further reduces scope for BoC rate cuts.
"Against this backdrop, the BoC will probably leave interest rates unchanged next week. However, it is likely to point to numerous downside risks such as weaker US demand and a renewed drop in oil prices, thus for now leaving the door open for further interest rate cuts." notes Commerzbank in a report.
