Economy beats expectations
The Canadian economy grew by 0.5% in August, compared to 0.2% in July.
Job growth was up 34,000 in October, the second consecutive monthly gain, but the unemployment rate held steady at 7.1% as more people entered the labour force.
Canada's merchandise trade surplus sank to $5.1 billion in September, far below market expectations calling for a surplus of $7 billion. Exports were to blame, dropping 3.4% during the month, with every major commodity group posting declines.
Core inflation remains close to the mid-point of the Bank of Canada’s target range of 1% to 3%. Clearly, economy-wide inflationary pressures at this time are not driving the Bank of Canada to hike rates. As the economy grows in 2005, RBC Royal Bank fully expects a continued withdrawal of monetary stimulus. A pause during the current tightening cycle is possible, however, as the Bank of Canada continues to act proactively to keep future inflation down.
Bank Rate
Canadian Interest and Exchange Rate Forecast
These figures are based on the calendar year.
The actual rates are based on Bank of Canada rates.
The forecasts are from RBC Royal Bank®.
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