Institution: The probability of another rate hike by the Bank of Canada in December is low, and the Canadian dollar faces downside risk.

(1) Monex Europe analysts stated in their report that after the Bank of Canada raised interest rates by 25 basis points to 2.5% on Wednesday, there is little likelihood of another rate hike in December, posing downside risks for the Canadian dollar. (2) Citing data, the institution noted that the market currently assigns a 44% probability to another Bank of Canada rate hike in December. (3) Analysts pointed out that two consecutive rate hikes are hard to align with current data: CPI excluding gasoline rose by 2.2%, the Bank of Canada's preferred core inflation indicator is at 1.85%, and the Canadian economy has lost about 110,000 jobs over the past two months. (4) Analysts indicated that the Federal Reserve may raise rates in December, and if expectations of a Bank of Canada rate hike weaken, the USD/CAD exchange rate could rise to between 1.41 and 1.42.