The Bank of Canada will signal the need for lower interest rates at next week’s policy meeting as officials seek to boost economic growth by devaluing the currency, according to Societe Generale SA.
“They’ll move to an easing bias in the next meeting,” said Sebastien Galy, senior foreign-exchange strategist at Societe Generale, by phone from New York. “The Canadians have most probably decided they’re too expensive and need to reprice the economy.”
The Canadian dollar has dropped 5 percent against the U.S. dollar and touched a four-year low, since Oct. 23, when Bank of Canada Governor Stephen Poloz dropped language about the need for higher rates that had been inserted into policy statements by his predecessor Mark Carney more than a year earlier. During a Dec. 12 press conference, Poloz said the shift was to head off the dangers of low inflation and the central bank had no view on the currency.
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