# Proof Point: Will a weak Canadian dollar fire up inflation? - RBC Economics

> RBC Economics says a weaker Canadian dollar will not derail the current disinflation trend, since services and imports from outside the U.S. now shape prices more than exchange rates. The loonie was at its softest in almost three years at the time of writing.

- Date: 2023-04-18 · published 2023-04-18T12:00:00.000Z
- Category: macro · region Canada · magnitude low
- Page: https://feedsoft.ai/events/36637-proof-point-will-a-weak-canadian-dollar-fire-up-inflation-rbc-economics
- Commodities: [Canadian Dollar (CAD per USD)](https://feedsoft.ai/c/USDCAD.md)

## Why it matters

The analysis suggests the Bank of Canada may not need to respond to currency weakness with extra rate hikes. This keeps the CAD outlook tied to domestic demand rather than to grain or oilseed trade.

## Read by commodity

- USDCAD: neutral

## Sources

- rbc.com: https://www.rbc.com/en/economics/canadian-analysis/featured-analysis/insights/proof-point-will-a-weak-canadian-dollar-fire-up-inflation/

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