Lower Canadian dollar unlikely to catapult economy

The Canadian dollar's decline, which began about a year ago, has reinforced the Bank of Canada's prior view that it's long-awaited export recovery is finally set to go. Over the past year, however, the currency depreciation has had little impact on Canada's still sizeable real trade deficit. Should this trend persist, as we expect, then it seems increasingly likely that the Bank of Canada will eventually have to think more seriously about lowering interest rates.