Bank of Canada (BoC) Governor Stephen Poloz will take part in a panel discussion at the Export-Import Bank of the United States in Washington, D.C., on April 20.
Poloz has been a supporter of the exporting sector and has used rhetoric and monetary policy to boost the competitiveness of the Canadian economy. The fall in energy prices is forcing the country to diversify its economy in a bid to regain its manufacturing strength. A weaker currency will help toward reducing the country’s dependency on energy exports, but the latest forecast from the BoC might be too optimistic on the timetable of the recovery.
The setting at the Export-Import Bank panel will help Poloz push Canada’s export agenda. The market’s reaction to the BoC’s latest quarterly forecasts wasn’t nearly as optimistic. What the BoC views as increasing economic strength can quickly fizzle into a reversal if Canada’s growth misses such lofty expectations.
The central bank held its benchmark interest rate at 0.75%, allowing plenty of room to act if needed. On that score, market participants widely expect both Australia and Canada to slash their respective interest rates in the not-too-distant future.
The Reserve Bank of Australia, despite an encouraging employment report, is expected to cut rates at its next meeting in early May. The BoC rate cut will be more data dependent as the USD/CAD is currently higher after soft data out of the U.S., and a recovery of oil prices, gave the loonie a lift.