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The Bank of Canada (BoC) is set to leave the interest rate unchanged in its last decision of the year and is set to comment on the economy after Canadian employment figures beat estimates but growth missed. As we get closer to the release time, here are the expectations as forecasted by the economists and researchers of seven major banks, regarding the upcoming announcement. 

Ahead of the meeting at 15:00 GMT, the USD/CAD pair has witnessed some fresh selling as snaps two days of a winning streak.

RBC Economics

“Don’t expect any significant shift in the Bank’s commitment to support the economy by keeping interest rates low for an extended period.”


“We don’t expect any material changes. The overnight rate will remain at the ELB with no change to forward guidance or QE purchases. The statement itself should have a balanced tone, reflecting offsetting developments in the disappointment on Q3 GDP versus plans for more fiscal stimulus and a vaccine distribution timeline that exceeds BoC estimates.”


“We see very little room for surprise. The jump in employment in November is another factor that suggests the BoC does not need to expand its stimulus package (via rate cuts or more QE). At the same time, with lingering uncertainty about the timing for rolling out a vaccine, Governor Tiff Macklem is unlikely to sound too hawkish or upbeat on the recovery. The most preferable scenario for the BoC and the most likely to materialise in our view is for the meeting to go down as a non-event.”


“The Bank of Canada’s rate announcement should be a quiet affair. Having pulled back the QE volumes and lengthened their maturity at the last meeting, it’s too soon to expect a further adjustment. They will likely cite additional fiscal stimulus as a positive for the outlook. The one item to watch for in the statement is whether they opt to mention the appreciating Canadian dollar as a potential drag on growth. That would typically be a warning signal for foreign exchange markets, but the Bank has limited choices now in terms of how to lean against it, given that a cut to a 0.1% overnight rate might only work for a day or two.”


“With the economy still in need of stimulus, and with policymakers reluctant to bring their main tool into negative territory, we expect rates to remain at the effective lower bound. Amidst slower but still-elevated GoC bond issuance, and after a re-calibration at the last meeting, the central bank will most likely keep its QE program unchanged. However, outsized accumulation of government debt by the central bank could eventually become a problem. Another reduction of the Bank of Canada’s weekly purchase pace to $3 billion per week could be on the table as soon as early next year. There would still be room then for the Bank to shift more of its purchases out the curve to keep term rates in check and maintain a high degree of accommodation.”

Credit Suisse

“We do not see the BoC as likely to introduce additional stimulus or changing forward guidance, as recent developments have been relatively balanced.”


“We expect the Bank of Canada to leave the policy rate unchanged at 0.25%. This decision will be accompanied by a statement but no press conference or new projections. The tone of the statement may have a more dovish tilt given the de facto tightening caused by the 4% sell-off in USD/CAD since the last meeting on October 28. The Bank is likely to reiterate the need for fiscal support which has been forthcoming. In fact, Canada has seen more fiscal relief as a % of GDP than any developed nation. We recently revised down our USD/CAD forecast and expect the pair to primarily trade a 1.28-1.30 range over the next one to three months.”