S&P/TSX Composite steady after BoC interest rate decision

The S&P/TSX Composite index and the USD/CAD exchange rate held steady on Wednesday after the latest Bank of Canada (BoC) decision. The USD to CAD pair was trading at 1.3563 where it has been at in the past two days. 

On the other hand, the TSX index, which tracks the biggest Canadian companies, rose to C$20,500, its highest point since September 18th. It has jumped by less than 10% from the lowest level in November. Other global indices like the Dow Jones and the Nasdaq 100 have also soared.

The Bank of Canada left interest rates unchanged at 5.0% as was widely expected. In addition, the bank maintained its quantitative tightening (QT) process. QT is a process in which the bank reduces its total assets in a bid to cool the economy.

In a statement, the bank noted that the economy had stalled in the second half of the year. It contracted by 1.1% in Q3 after expanding by 1.4% in Q2. The bank cited the steadily high-interest rates, which are hurting consumer spending. The statement added:

Economists believe that the Bank of Canada will start cutting interest rates in the coming months since the economy is slowing. The same is true in the United States, where they expect the bank will slash rates in the first half of the year.

Canadian bank stocks rose after the BoC decision. Toronto-Dominion (TD) share price rose by 0.96% while Royal Bank of Canada (RBC) jumped by 0.90%. Other companies like National Bank of Canada and Bank of Nova Scotia were also in the green.

The top-performing stocks in the TSX Index were Lithium Americas, Pason Systems, Torex Gold Resources, and Trisura Group. All these shares jumped by more than 4% after the decision.