The BoC noted in its Business Outlook Survey for the third quarter on Monday that consumers thought that interest rates will go up over the next 12 months.
USD/CAD stays under modest bearish pressure in the American session and the pair was last seen losing 0.23% on the day at 1.3625.
Key Quotes
“One-third of firms expect Canada to be in recession over the next year, the same as in Q2.”
“Recent indicators of future sales continue to moderate; balance of opinion in Q3 was flat compared to +8 in Q2.”
“27% of firms think it will take longer than three years to return to the BoC’s 2% inflation target, down from 32% in Q2.”
“53% of firms expect inflation to remain above 3% for the next two years, down from 64% in Q2.”
“More than 70% of firms across broad range of sectors say higher interest rates are negatively affecting them.”
“Around 80% of firms believe effects of past monetary policy tightening on their businesses are far from over.”
“Firms’ intentions to hire are below their historical average; firms report widespread easing in intensity of labor shortages compared to Q3 2022.”
“Overall Q3 Business Outlook Survey Indicator -3.51%, lowest since Q2 2020; Q2 2023 was -2.31% (rev from -2.15%).”
“Firm anticipate gradual easing in wage growth over next 12 months.”
“55% of Canadians expect a recession the next year, up from 50% in Q2.”
“Consumer expectations for 5-year ahead inflation have edged down to 2.75% from 2.89% in Q2.”
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Tags BoC Business Outlook Survey consumers firms inflation interest rates Q2
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