Monex Europe: The Bank of Canada is unlikely to raise interest rates again in December, and the Canadian dollar faces downside risks.

Monex Europe analysts stated in a report that after the Bank of Canada raised interest rates by 25 basis points to 2.5% on Wednesday, the likelihood of another rate hike in December is low, putting the Canadian dollar at risk of depreciation. According to LSEG data, the market currently expects a 44% probability of another rate hike by the Bank of Canada in December. The analysts noted: "Two consecutive rate hikes are hard to reconcile with the current data. The data shows that, excluding gasoline, the CPI increase is 2.2%, the Bank of Canada's preferred core inflation measure is 1.85%, and the Canadian economy has shed about 110,000 jobs over the past two months." The analysts pointed out that the Federal Reserve may raise rates in December. If market expectations for a Bank of Canada rate hike weaken, the USD/CAD exchange rate may rise to between 1.41 and 1.42.