Canada Holds Interest Rates Steady Amid Trade War Uncertainty

The Bank of Canada is widely expected to hold its key policy rate steady at 2.25% on Wednesday, despite strong economic growth in the second quarter.

Economic data showed that Canada's economy grew at an annualized rate of 3.3%, above the central bank's forecast of 2.5%, as exports jumped and domestic demand strengthened.

However, a renewed trade war with the United States clouds the outlook, with tariffs on Canadian goods taking effect last month and retaliatory duties from Canada set to kick in next week.

Randall Bartlett, deputy chief economist at Desjardins Group, said that 'the risks are evolving, the risks are broadening' but still remain broadly balanced around inflation.