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The Canadian greenback has already weakened, with the alternate fee nearing its lowest since November, reflecting differing financial outlooks between Canada and the US.
Projections point out that US coverage charges might stay over 50 foundation factors larger than Canada’s within the coming yr, suggesting extra pronounced financial and inflationary developments in Canada in comparison with the US.
This angle aligns with different central banks just like the Financial institution of England and the European Central Financial institution, which additionally don’t foresee the necessity to preserve excessive charges if these anticipated within the US.
Economists stay divided on the possible divergence between Canadian and US coverage charges, with some citing a most of 100 foundation factors as tolerable earlier than financial distortions come up, whereas others view 50 foundation factors because the restrict.
Traditionally, Canada’s financial coverage has carefully adopted that of the Fed, reflecting the deep financial ties between the 2 nations.
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