Our forecast that the Bank of Canada will cut interest rates earlier and more aggressively than the Federal Reserve means that the loonie is likely to depreciate, but we doubt the move will be large enough to push up imported goods inflation significantly. That said, if the Fed were to hold off from cuts entirely, then exchange rate concerns mean the Bank would have to take a slower approach than we currently assume.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.