Goldman says Canada to skip now, add final rate hike in October
BNN Bloomberg
The Bank of Canada will make its final rate increase in October after a pause next week, says Goldman Sachs Group Inc.
The central bank will take the latest data “as an encouraging signal that the latest hikes are working their way through the economy,” Goldman analyst Isabella Rosenberg said. She had previously viewed the chances of rate hike at the September meeting as “fairly high.”
Rosenberg is reining in her view on the central bank’s near-term rate path after a report Friday showed Canada’s economy unexpectedly contracted in the second quarter. Canada may already be in the middle of a technical recession, if output shrinks again in the third quarter. Policy makers in Ottawa will decide on the key rate on Sept. 6.
The Canadian dollar is poised to strengthen against the euro, according to Rosenberg.
