Bank of Canada keeps rates on hold, says too early to consider a cut

(Reuters) - The Bank of Canada (BoC) kept its key overnight rate steady at 5% on Wednesday as expected and said it was still too early to consider a cut, given the persistence of underlying inflation.

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AVERY SHENFELD, CHIEF ECONOMIST AT CIBC CAPITAL MARKETS:

"Look for greater clarity to come in April's Monetary Policy Report, which in addition to a fresh forecast, should show enough optimism in the battle against inflation to set markets up for a rate cut in June, assuming the data in the coming month point in that direction. But for now, the overall message is that its too early to cut, and that they need to see more progress on inflation."

KARL SCHAMOTTA, CHIEF MARKET STRATEGIST AT CORPAY

"(The) Bank of Canada did put out a relatively well-balanced statement as markets had anticipated. But with some of the dovish risks that existed going into this decision erased at this point, the Canadian dollar is firming against the greenback, and on a broader basis canceling other majors."

"It sounds as if the Bank of Canada is very much following the Federal Reserve footsteps in expressing a need for greater confidence in the pace of disinflation. And that suggests that we're going to need to see additional data releases before they pull the trigger on cutting rates."

(Reporting by Steve Scherer; Editing by Denny Thomas)