Canadian dollar faces steep downfall following Brexit

While the Bank of Canada's Governor, Stephen Poloz, kept the option open for further interest cut, his counterpart in the US Federal Reserve, boosted the US dollar by saying that the American economy had been getting closer to run on its own.

Poloz in a media meet had made it clear that U.S. President-Elect Donald Trump's policies had been creating uncertain atmosphere in forecasting about Canadian economy, but at the same time higher appreciation of Canadian dollar would be a taboo.

The projected growth rate for real GDP stood at 2.1 in 2017 and 2018.

It gave the bank confidence of leaving policy rate unchanged at 0.5 percent, although the possibility of rate had not been ruled out by the Governor.

When questioned of how the Canadian economy would be impacted by Trump's presidency, the Bank weighing in a positive way mentioned the possibility of increased foreign demand due to U.S. fiscal stimulus.

However, the bank warned that the promised corporate tax cuts envisaged by Trump could put Canada under competitive disadvantage.

Central Bank also admitted that they had not contemplated any 'protectionist measures’ as opposed to Trump's rhetoric campaign. 

"While prospective protectionist trade measures in the United States would have material consequences for Canadian investments and exports, these measures had not been included in the base case". 

Analysts, however agree that it would be too early to predict about the future of Canadian trade and investment until Trump assumes Charge. 

(Reporting by Chandan Som ).