With the economy improving, the Bank of Canada�s first interest rate hike is expected in September. Manufacturing continues to gain strength. The job market improved in May. Low interest rates have kept the housing market strong. Retail sales fell in April.
Minority governments have generally been negative for the CAD; however, the currency has strengthened recently. The economic impact of the election will be minimal. Although inflationary risks are rising, inflation will continue to remain tame until next year. The BoC will raise rates by the end of next quarter. The Canadian dollar will end Q3 slightly weaker, before strengthening.
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