We expect the Bank of Canada to cut rates by 25 bps. Market expectations imply it will be a close call decision with about 50% chance priced in by the rates market and 15 out of 29 surveyed economists calling for a cut. Our economists’ forecast is driven by the recent underperformance of the economy. Exports have also been lacklustre and we suspect the BoC would welcome some further CAD weakness. While previously it looked like this could be achieved via a Fed hike, US policy rates are now unlikely to move in Q3, implying that the BoC may need to act. For USDCAD, the 2015 high of 1.2835 is looking vulnerable.