The central bank is holding its trend-setting rate at 1.75 per cent in a decision that follows a quarter-point increase at its previous policy meeting in October. The bank raised its rate to that level in October, the fifth time since the summer of 2017 that it made a decision to hike.
Sebastien Lavoie, Laurentian Bank's chief economist, said the wording of the Bank of Canada's statement signals a shift from its message at the October meeting when it seemed to be looking "more aggressively" at speeding up the pace of rate hikes.
As analysts at TD Securities note: "The communique should be fairly short, and while the Bank will note that weaker commodity prices present a headwind to the outlook, we expect that they will again warn that higher interest rates will be needed".
The bank also underlined several recent economic developments that it will now take into account. Likewise, if the BoC has a dovish view on the Canadian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish. Many market watchers had expected governor Stephen Poloz to wait until at least January before his next rate increase.
The Bank of Canada has estimated it will no longer need to increase the interest rate once it reaches a level of between 2.5 per cent and 3.5 per cent, but Poloz has said this destination range remains "sufficiently uncertain" and could move up or down.
DePratto added that Poloz's speech in Toronto on Thursday will carry more significance than usual given all the moving parts in the Canadian economy right now.
"Activity in Canada's energy sector will likely be materially weaker than expected", the statement said. The bank says it's related to factors such as a drop in business investment, which it largely connects to the significant uncertainty around trade last summer.
It will also be watching for positive developments such as more signs the economy can still expand without stoking inflation. The bank pointed to recent downward revisions to gross domestic product data that suggested there's still some space for non-inflationary growth.