CAD: Macklem opens the door to lower rates – DBS

Bank of Canada Governor Tiff Macklem said on Tuesday that the central bank is prepared to lower interest rates if needed to support the economy.

The comment comes as the Bank of Canada prepares to release its latest interest rate decision on Wednesday.

Economists expect the central bank to keep its benchmark interest rate unchanged at 1%. However, in his speech, Macklem indicated that the Bank of Canada is willing to cut rates if needed to boost the economy.

Macklem said that the Bank of Canada is closely monitoring the economy and is prepared to act if necessary.

He noted that the global economy is slowing and that there are some signs of weakness in the Canadian economy.

"We are prepared to do what it takes to support the economy and keep inflation low," Macklem said.

Macklem's comments were welcomed by the financial markets, which saw them as a sign that the Bank of Canada is prepared to take action to support the economy.

The Canadian dollar rose against the US dollar following Macklem's speech.

DBS Group Research said in a note to clients that Macklem's comments "open the door to lower rates" and that the Bank of Canada is likely to cut rates in the coming months.