Inflation has remained at the bottom of the Bank of Canada's 1% to 3% target range for over a year now, highlighting why the Governor is in no hurry to raise interest rates anytime soon. (See Chart.) Should the economy struggle again this year as we expect, disinflationary pressures will intensify. But the Canadian dollar's recent decline will prevent inflation from falling any further. Nevertheless, at some point this year, we would expect the Bank of Canada to signal an easing bias, which will put even more downward pressure on the dollar.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services