Following the Bank of Canada's (BoC) decision to hike the policy rate by 50 basis points, Governor Tiff Macklem said they are getting closer to the end of the tightening phase but added that they are not there yet.

Additional takeaways

"We are still far from the goal of ensuring inflation is low, stable and predictable."

"There are no easy outs to restoring price stability, we are trying to balance the risks of under- and over-tightening."

"We expect growth to stall in the next few quarters; once we get through this slowdown, growth will pick up."

"We noted the emergence of financial stresses in some markets in recent months."

"Seeing early encouraging signs that underlying inflation is coming down."

Market reaction

The USD/CAD pair, which jumped to a daily high of 1.3650 with the initial reaction to the BoC's dovish hike, lost its traction and was last seen losing 0.5% on the day at 1.3545.