Canada Holds Rates Amid Strong Growth and Trade Tensions

The Bank of Canada is expected to keep its key policy rate unchanged at 2.25% on Wednesday, giving it room to wait while a renewed trade war with the United States clouds the outlook.

Canada's economy grew at an annualized rate of 3.3% in the second quarter, exceeding the central bank's 2.5% forecast as exports jumped and domestic demand strengthened.

The improvement came before U.S. President Donald Trump's new 50% tariffs on about $20 billion of Canadian goods took effect last month and Canada announced retaliatory measures.