Canadians May Get Relief on Interest Rates

Canadians may see some relief on interest rates as the Bank of Canada is expected to cut rates on Wednesday. However, experts have warned that if the central bank makes a significant cut, as many in the market anticipate, the already weakening Canadian dollar could fall further.

The Bank of Canada is widely expected to reduce its benchmark interest rate for the fifth consecutive time tomorrow. The current rate stands at 3.75 percent, and many economists are predicting a 50-basis-point (or half a percentage point) cut.

This expectation of a substantial rate cut has grown following last month's rise in the unemployment rate to 6.8 percent, which has also contributed to the depreciation of the Canadian dollar.

On Friday, the Canadian dollar fell by about half a cent against the U.S. dollar, and as of Monday, it stood at 70.5 cents, roughly 4 cents lower than its value in September.