08:57 AM EDT, 09/06/2024 (MT Newswires) -- The Bank of Canada (BoC) cut rates again on Wednesday for the third consecutive time since June, bringing its policy rate to 4.25%, noted UBS.

This didn't come as a surprise, as inflation has moderated markedly, with all the major measures within their target range, wrote he bank in a note to clients.

In addition, economic activity continues to slow, suggesting more disinflationary pressures ahead.

The Canadian dollar (CAD or loonie) rallied slightly against the US dollar (USD) on the day, but this was more related to the USD than the BoC, stated UBS.

The bank expects additional policy easing from the BoC in the coming months, which should make the currency less attractive from a carry perspective. Nevertheless, UBS believes USDCAD can edge even lower, with the United States Federal Reserve embarking on rate cuts and the USD bull cycle likely to end.