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The bank also said "the reduction in commodity prices has been a significant factor in the decline of the Canadian dollar against the U.S. dollar."

The falling dollar and "weaker global growth" will have "opposing effects on the demand for Canadian goods and services", the bank said in a statement.

Domestic demand in Canada has slowed but "remains strong", the bank said.

Spending by Canadians "continues to be supported by financial conditions that remain significantly better than those in most other major economies and by income gains stemming from past improvements in the terms of trade", the bank said.

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