Bank of Canada to keep rates unchanged

This week, the Canadian Dollar will dance to the tunes of the interest rate decision by the Bank of Canada. A continuation of a neutral policy stance is expected from Bank of Canada Governor Tiff Macklem as Canada’s inflation is softening consecutively. The inflation rate has already decelerated to 5.2% in February as the Bank of Canada monetary policy is restricted enough to tame inflationary pressures.

Last week, Canada’s employment data remained extremely tight. Demand for labor crossed expectations significantly and the Unemployment Rate was trimmed further to 5%. This could put some pressure on the Bank of Canada for reconsidering policy stance.