The Bank of Canada Governor Stephen Poloz will part of the panel discussion at the Export-Import Bank of the United States, in Washington DC. The central bank governor has been a supporter of the exporting sector and has used rhetoric and monetary policy to boost the competitiveness of Canada. The fall in energy prices is forcing the Canadian economy to diversity and seek to regain its manufacturing strength. A weaker currency will help towards reducing the country’s dependancy on energy exports, but the latest forecast from the Bank of Canada might be too optimistic on the timetable of the recovery.
The setting of the Export-Import Bank will help Governor Poloz push Canada’s export agenda. The market received the latest quarterly forecasts from the Bank of Canada with a bit of shock at their optimism. This surprise can quickly turn into a reversal if Canada’s growth misses those lofty expectations. The central bank held rates at 0.75% which still gives it plenty of room to act if needed. Australia and Canada share the market’s expectations of an interest rate cut, the main difference seems to be on the timing. The Reserve Bank of Australia despite an encouraging employment report is expected to cut rates in the next meeting of the central bank. The BOC rate cut will be more data dependent as the USD/CAD is currently higher after softer data out of the U.S. and a recovery of oil prices boosting the loonie.
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