The strong CAD has been dampening the Canadian recovery and will be a factor in assessing the economy and monetary policy.The recovery will continue but moderate, Lane says. China’s currency move will help rein in global imbalances and take pressure off the Canadian dollar, he says.
That’s not exactly a surprise, as the exchange rate is always a factor in Canadian monetary policy but Lane does make a case that the drag could dissuade multiple further hikes in CAD, as the market presently expects.
USD/CAD is near session highs, helped by these comments and by a pullback in crude. Oil is down $0.67 at $77.15.
