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Showing posts from July, 2011

Dollar within striking distance of modern-day high

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TORONTO (Reuters) - The Canadian dollar looks set to extend a rally that's taken it to 3-1/2 year highs against the U.S. dollar this week, as more hawkish Bank of Canada comments lifted the currency and global investors pushed into the safety of Canadian assets. Given the central bank's clear signal it would likely resume interest rate hikes later this year, analysts said the currency might even revisit its modern-day high. It reached C$0.9059 to the U.S. dollar, or US$1.1039, in November 2007, according to Thomson Reuters dealing data. "Yes, Canada could hit post-Civil War highs once again," said Michael Woolfolk, a senior currency strategist at BNY Mellon in New York. "(Hitting the high) would not be altogether unwarranted if Canada begins raising interest rates again. It's certainly not in our forecasts, but it's a nontrivial possibility of hitting C$0.90 within the next 12 months." Based on available data, the Canadian dollar was at an al...
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Economists: Rates to Remain on Hold

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CanadianMortgageTrends.com Despite robust headline inflation and growing employment, the market expects no rate change when the Bank of Canada meets tomorrow. A drab North American economy, strong loonie, and European debt concerns will keep rate hikes at bay, according to all 37 economists polled by Reuters. Not one of them expects a rate change until later this year or early 2012. The overnight rate has now stood at 1.00% for nine months. Here are some soundbytes about Tuesday’s rate announcement: “The arguments are there for the Bank of Canada to start hiking rates next week, but we increasingly think that this fall might even be too early given the problems we are seeing in the global economy.” — Jimmie Jean, Desjardins Capital Markets. (Source: CBC News) “While (the recent) pace of economic growth will be sufficient to get the economy back to full potential by mid-2012, we highly doubt this news will push the Bank of Canada off the sidelines at next week’s fixed rate a...
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How Vulnerable Are Canadian Housing Prices?

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Benjamin Tal - Deputy Chief Economist, CIBC World Markets So is it a bubble? Glancing at popular metrics such as the price-to-income ratio or the price-to-rent ratio, it is tempting to conclude that the housing market is already in clear bubble territory and a huge crash is inevitable. Tempting, but probably wrong. When it comes to the Canadian real estate market at this stage of the cycle, any statement based on average numbers can be hugely misleading. The truth is buried in the details—and there the picture is still not pretty, but much less alarming. For the full article, please click on the link below http://research.cibcwm.com/economic_public/download/feature2.pdf
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TD Bank forecasts low interest rates this year

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OTTAWA — The TD Bank says Canadians can expect borrowing costs to remain near record lows for the rest of the year. That’s because the pace of the economic recovery is expected to slow sharply in Canada, the United States and much of the world. As such, the Bank of Canada will likely refrain from raising its key interest rates until 2012, TD says. The central bank has had its policy rate set at one per cent since September. The rate was set at all-time low of 0.25 per cent through much of the recession, to stimulate borrowing and spending, until a series of rate hikes began last summer. The still-low rates have been a double-edged sword for Canadians who are already piling up debt at record levels, according to the Certified General Accountants Association of Canada. The association says Canadian household debt has reached a record $1.5 trillion, and calculates that more than half of indebted Canadians are borrowing just to afford day-to-day living expenses such as food, housing and tr...
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