Economists at the National Bank of Canada have reaffirmed their forecast for the Bank of Canada’s interest rate policy, expecting a gradual tightening cycle extending into 2027. This outlook remains despite recent strong Canadian labour market figures and robust GDP growth reported in the second quarter.
According to FX Street, National Bank economists Taylor Schleich and Ethan Currie highlight that, while economic data shows strength, accumulated slack and delayed effects in the data justify a slower pace of monetary tightening. They suggest that the Bank of Canada will proceed cautiously to avoid overheating the economy.
For Japanese investors and traders, this signals a steady Canadian dollar outlook amid a cautious yet persistent tightening stance, which could influence FX and equity market dynamics involving Canadian assets.