Updated
Updated · Bloomberg · Jun 18
Bank of Canada Seen Holding Rates Through 2027 as Loonie Slides to C$1.417
Updated
Updated · Bloomberg · Jun 18

Bank of Canada Seen Holding Rates Through 2027 as Loonie Slides to C$1.417

1 articles · Updated · Bloomberg · Jun 18

Summary

  • Bank of America expects the Bank of Canada to keep interest rates on hold through most of 2027, even if the Federal Reserve starts tightening again.
  • C$1.417 per US dollar marked the loonie’s weakest intraday level since April 2025 on Thursday, yet the bank sees policymakers tolerating further currency weakness.
  • The pressure on Canada’s currency has come from a stronger US dollar and softer oil prices as traders bet on impending Fed rate hikes.
  • A US-Iran peace deal holding together has also weighed on oil, reducing support for the commodity-linked Canadian dollar.

Insights

If the fragile US-Iran peace deal collapses, could the Canadian dollar actually rally instead of weaken?
Is a weaker loonie a cure for Canada's economy or a symptom of a much larger problem?