The Bank of Canada is not expected to increase the amount of monetary policy stimulus, unlike the ECB and BoJ.
"The BoC will still lag the Fed substantially as far as any tightening of monetary policy is concerned. The weakness in the oil-producing regions, brought about by the recent slump in oil prices manifested in the Canadian economy undergoing a technical recession in the first halfof 2015", says Economics TD.
This has widened the output gap, likely delaying any rise in underlying inflation back to the central bank's target of 2%.
By allowing Canadian short-term rates to fall below their U.S. counterparts, the Canadian export sector has benefitted from consequent declines in the value of the loonie.
