OTTAWA, July 11: The Bank of Canada will need overwhelming evidence to persuade it to raise interest rates again this year after the spectre of a US slowdown and a strong currency led it to halt its tightening campaign on Tuesday.

Nobody was surprised by the bank's decision to hold its key overnight rate unchanged at 4.25 per cent for the first time after seven consecutive hikes between September 2005 and last May.

But markets were taken aback by its new emphasis on weaker growth in Canada's export-reliant economy next year and in 2008, making it all the less likely it will react to signs the economy is heating up in the short term.

Sept. 6 is the bank's next announcement. Only if there is exceptional growth in jobs, prices and output after that, the bank could make a move in October or December, argues Orr, who does not rule out a rate decrease if data disappoints on the downside.—Reuters