Don’t miss this month’s edition of the George Davis Report, where George discusses RBC’s 2023 economic outlook.
What you need to know:
The sharp 4% increase in the Bank of Canada overnight rate since March does not bode well for growth next year.
RBC Economics expects a mild recession to hit in H1 2023 as the consumer and housing market weigh on growth.
Recent BoC communication has opened the door to a slowdown in rate hikes, subject to the evolution of incoming data.
RBC Economics is looking for the BoC to pause rate hikes at a terminal rate of 4.25% through 2023 as they keep rates in restrictive territory and assess the lagged impact of rate hikes.
The economic profile may present the scope for some CAD weakness in early 2023, followed by CAD gains as the year progresses.
For the trading range:
USD/CAD
Buyers
1.3300/1.3400
Sellers
1.3700/1.3800