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Bank of Canada interest-rate decision September 2018

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Bank of Canada Poloz
Bank
of Canada Governor Stephen Poloz takes part in a news conference
upon the release of the Monetary Policy Report in Ottawa January
21, 2015.

REUTERS/Chris
Wattie


  • The Bank of Canada is expected to hold its key rate
    steady at 1.5% on Wednesday.
  • The central bank has emphasized taking a gradual
    approach to raising rates.
  • The decision comes just as the trade officials restart
    talks on NAFTA, which President Donald Trump has threatened to
    exclude Canada from.
  • Watch
    the Canadian dollar trade in real time here
    .

The Bank of Canada is expected to hold rates steady at a policy
meeting Wednesday as trade uncertainty threatens to dampen
growth. 

All but one of 31 economists polled by Reuters expect the
central bank, which has emphasized a gradual approach to
monetary policy, to leave its target for the overnight rate
unchanged at 1.5%. It last raised its benchmark interest rate in
July by a quarter percentage point, marking the fourth hike since
last summer. 

Stephen Brown, a senior economist at Capital Economics,
noted a humming economy could embolden policymakers.

Canada’s economic growth accelerated in the second quarter
at the fastest pace in a year, the national statistics agency
said last week, driven by a sharp increase in exports and
consumer spending.

“With the data surprising to the upside in recent months,
Governor Stephen Poloz seems ready to act soon,” Brown
said. 

But at its last policy meeting, the BOC expressed concern
about ongoing trade tensions between Canada and the
US. 

President Donald Trump recently threatened
to exclude Canada from a final NAFTA agreement and to impose
tariffs on Canadian car imports to the US.

Negotiations are expected to restart in
Washington on Wednesday, just after a
US Commerce Department report
 showed the trade
deficit with Canada jumped in July by about 58% to $3.1 billion.
The trade deficit, which measures the difference between what the
US buys and sells abroad, has been a source of frustration for
Trump. 

The Canadian
dollar
edged higher against the US dollar ahead of the rate
decision.

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