Canada: Cyclical rebound and steady BoC stance – RBC

FXStreet Insights Team FXStreet

Royal Bank of Canada (RBC) economist Claire Fan expects Canada’s economy to rebound in Q2 2026, supported by resilient household spending, recovering business investment and expanding net trade. Growth is projected to continue over the second half of 2026, with CUSMA exemptions still shielding most Canadian exports from U.S. tariffs. The Bank of Canada is expected to keep interest rates on hold throughout 2026.

Rebound supported by trade and spending

"Canada’s economy is on track to rebound in Q2, driven by resilient household spending, recovering business investment and expanding net trade."

"Growth is expected to continue over the second half of 2026 with CUSMA exemptions still protecting most Canadian exports from U.S. tariffs."

"The Bank of Canada is expected to remain on hold in 2026."

"Uncertainties around trade and energy prices are persisting but recent developments—broadly easing energy price growth and firming economic growth—have evolve broadly as expected, reaffirming the BoC’s steady stance."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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FXStreet Insights Team

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