Bank of Canada Likely to Raise Interest Rates in 2014

Mr. Porter predicts the overnight rate will go up by half a percentage point, which could put upward pressure on the Canadian dollar until the U.S. raises its interest rates the following summer.

"If the currency gets too strong then the bank will likely stand back and won't raise interest rates as much as what we've predicted," Porter said following a speech he gave at the Toronto Region Board of Trade on Wednesday.

The strong Canadian dollar has been a major impediment to Ontario's manufacturing sector, said Porter, combined with weaker demand for goods from the U.S. and fierce competition from China.

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