Bank of Canada Unconcerned by Weak Dollar, Focused on 2% Inflation Goal

Bank of Canada Focuses on Inflation, Unconcerned by Weak Dollar

The Bank of Canada is not worried about the weakness in the Canadian dollar, according to economist David Rosenberg, who highlights that the central bank's rate policy is diverging from the Federal Reserve. In its recent deliberations, the Bank of Canada cut its key interest rate and identified five main risks to the inflation outlook, but the exchange rate was not mentioned as a concern.

Rosenberg points out that the minutes from the central bank's discussions show increasing confidence that inflation will reach and remain at the 2% target. He also reiterates his advice to be overweight on mid-duration Canada government bonds as an investment strategy.