07:55 AM EST, 12/11/2024 (MT Newswires) -- In line with the consensus, Commerzbank said it expects the Bank of Canada to cut interest rates another time by 50 basis points Wednesday to 3.25%.

Canada's central bank is slated to release its policy statement at 9:45 a.m. ET Wednesday.

The rate reduction estimate isn't only supported by the weak labor market, but also by recent weak growth, wrote the bank in a note to clients.

At the same time, the BoC is likely to look through the recent rise in inflation and focus instead on the disinflation successes of recent months, stated Commerzbank. It will likely be important what the BoC says about next year.

The market expects further interest rate cuts, although at a slower pace, added the bank.

Given the weak growth, the risk of United States tariffs on Canadian exports and the prospect of a further widening of the interest rate differential, the Canadian dollar (CAD or loonie) will continue to have a hard time against the US dollar (USD) for the time being, according to Commerzbank.