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The Bank of Canada is holding its benchmark interest rate at 0.5 per cent and providing a deeper assessment of the risks associated with the big economic unknowns of a Trump presidency.

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And the loonie’s charge higher is worrying policy makers at the Bank of Canada which held interest rates today.





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The central bank is keeping its key interest rate in place with the Canadian economy showing signs of improvement — but it also warns of the significant uncertainty tied to potential policy changes by the United States, its largest trading partner.

This is the bank’s first release of its updated forecasts and broad economic assessment since Donald Trump won the U.S. presidential election in November. Trump is to be inaugurated as President on Friday.

For now, however, the bank is offering an optimistic outlook by largely sticking with the growth expectations that it released in October, by predicting the economy to expand by 2.1 per cent in 2017 and 2018.

It says its base-case outlook only factors in the impact of the expected U.S. fiscal boost, which would help Canada through increased demand, and the effects of Trump’s vow to cut corporate taxes, which it notes would hurt Canadian competitiveness.