Investors anticipate that the Bank of Canada (BoC) will cut its policy interest rate by 25 basis points, marking the sixth consecutive monthly reduction. This would bring the policy rate down to 3%, with the possibility of further rate cuts in the future.

However, the Canadian dollar remains under pressure due to the rapid strengthening of the U.S. dollar, following President Donald Trump's announcement of an additional 25% tariff on Canadian imports. This policy directly impacts goods imported from Canada.

Nathan Janzen, Assistant Chief Economist at the Royal Bank of Canada, stated, "The Bank of Canada is expected to gradually cut interest rates by 25 basis points this Wednesday, further widening the gap with U.S. interest rates. Future rate cuts are likely to proceed more cautiously and will depend on economic data."

Source: Fxstreet