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U.S. trade policy and the timing of Donald Trump’s long-awaited tax reforms are helping to form a hazy outlook for Canada, but the domestic economy and, in turn, the loonie should be better equipped to deal with any negative developments in 2018 after putting a solid year of growth under their belt.

Regardless, the Bank of Canada is taking a more cautious stance on future monetary policy tightening following two interest rate hikes within a three-month span.

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“The Canadian dollar could be under some pressure early in 2018 as the BoC delays its rate normalization process in recognition of the uncertainties … but some recovery is anticipated once the BoC begins to match the pace of Fed tightening,” said Mark Chandler, head of Canadian rates strategy at RBC Capital Markets.

On the plus side, WTI oil prices are also forecast to average US$58 per barrel in 2018, providing some much-needed respite for the energy sector and the Canadian economy as a whole.