© Reuters. FILE PHOTO: Governor of the Bank of Canada Tiff Macklem walks outside the Bank of Canada building in Ottawa, Ontario, Canada June 22, 2020. REUTERS/Blair Gable/File Photo
OTTAWA, Oct 14 (Reuters) – A continued U.S. dollar rally may mean the Bank of Canada will “have more work to do” on interest rates and it is something the central bank is watching closely, Governor Tiff Macklem said on Friday.
The Canadian dollar has tumbled 8.5% versus the U.S. dollar since August, as aggressive interest rate hikes by the Federal Reserve and financial market volatility triggered gains for the safe-haven greenback.
If that persists, it “will mean that, other things equal, we’re gonna have more work to do on interest rates,” Macklem told reporters after International Monetary Fund and World Bank annual meetings in Washington. “We’ll be watching that closely.”