In a widely expected move, the Bank of Canada kept its benchmark rate unchanged on Wednesday, saying that it was yet to receive evidence that the economy would stick its current growth path. The central bank said that it was refraining from raising rates given the level of uncertainty which was clouding its outlook for the future, including the fallout of new U.S. economic policy.

At the same time, the Bank of Canada acknowledged that economic growth was surpassing its expectations. Recently released economic data bears out this fact and a section of analysts believe that the bank’s move is intended to preserve the competitiveness of the country’s exports. Given this backdrop, it makes good sense to invest in Canadian stocks benefiting from a booming economy.

Central Bank Keeps Key Rate Unchanged

The Bank of Canada kept its trendsetting overnight rate unchanged at 0.5%, stating that it was “too early” to believe that the economy had the ability to sustain higher growth. The central bank reiterated that it in its view, excess capacity was still present in the economy. It also cited prevailing uncertainty for its decision to hold interest rates. Foremost among these factors was uncertainty over the new U.S. administration’s economic policies.

At the same time, the bank raised its growth forecast for the year. The Bank of Canada now projects that GDP will increase by 2.6% in 2017, significantly more than its January estimate of 2.1%. A spurt in residential investment, as well some medium term factors such as the recommencement of spending in the energy sector is responsible for such an upward revision. However, the bank reduced its forecast for potential growth, citing the persistence of “weak investment.”

Multiple Growth Signals Imminent

The report was noteworthy because there was a word of caution for every positive pronouncement on the economy. Such a pattern was clearly visible even though the bank’s fresh projections mean slack will disappear within the first part of next year rather than mid-2018 as was projected earlier in January.

In fact, recently released data indicates that Canada’s economy is going from strength to strength. Data released at the very end of March revealed that the country’s economy expanded at an annualized rate of 2.3% in January. Such a rapid pace of growth was in keeping with the trend witnessed over preceding months. During the fourth quarter of 2016, GDP increased at a rate of 2.6%.

Additionally, the economy experienced 19,400 job additions in March, exceeding analysts’ estimates by a wide margin. Job additions for January and February were similarly strong, indicating that the labor market is also in good health.

Is the Bank of Canada Being Excessively Cautious?

Why then is the Bank of Canada being overly cautious despite numerous signs of a pickup in growth? Several economists believe that Bank of Canada Governor Stephen Poloz is taking a slightly gloomy view on the economy in order to prevent the Canadian dollar from appreciating. This also explains the central bank’s unwillingness to raise rates.

A relatively softer currency helps to preserve the price competiveness of Canadian exports, in particular that of non-energy goods. The central bank is possibly in favor of economic growth being generated by exports and higher capital expenditure rather than consumer spending and housing.

Poloz’s caution on this front has been borne out by the sudden trade deficit registered in February. According to data released last week, the economy experienced a trade deficit of $972 million after three consecutive months of trade surpluses. However, this is a likely short-term anomaly given that the economy is expected to grow at a faster pace going forward.

Our Choices

Despite the Bank of Canada’s unwillingness to raise rates and its cautious outlook, multiple signals of economic improvement are evident. GDP and employment numbers released recently have added to the upbeat mood since they have surpassed expectations by a wide margin.

Picking select stocks choices gaining from such a trend looks like a smart option at this point. We have narrowed down our search based on a Zacks Rank #1 (Strong Buy) and other relevant metrics. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bellatrix Exploration Ltd. (BXE - Free Report) is an oil and gas company engaged in the exploration for, and the acquisition, development and production of oil and natural gas reserves in the provinces of Alberta, British Columbia and Saskatchewan.

Bellatrix Exploration’s projected growth for the current year is 58.3%. Its earnings estimate for the current year improved 61.5% over the last 30 days.

Restaurant Brands International Inc. (QSR - Free Report) is a Canada-based quick service restaurant company. It is the parent company for Tim Hortons Inc. and Burger King Worldwide, Inc.

Restaurant Brands International’s projected growth for the current year is 14.9%. Its earnings estimate for the current year improved 1.1% over the last 30 days.

Cenovus Energy Inc. (CVE - Free Report) is an integrated oil company headquartered in Calgary, Alberta.

Cenovus Energy’s projected growth for the current year is more than 100%. Its earnings estimate for the current year improved 13.2% over the last 30 days.

Enerplus Corporation (ERF - Free Report) is a Calgary, Canada-based independent oil and gas production company with resources across Western Canada and the United States.

Enerplus’ projected growth for the current year is more than 100%. Its earnings estimate for the current year improved 5.7% over the last 60 days.