Where should the Loonie float versus the U.S. dollar?
By Mark Schadenberg
Firstly, even though I took an economics course at WCI in Grade 12 -- almost
30 years ago, I do not pretend to be an economist.
I don’t play an economist on TV either, but I am always told to be
more economical in my verbiage (Rogers TV).
Therefore, if I say somewhere between 94 and 95 makes the most sense,
I wouldn’t tell your friends about my number suggestions.
However, at the end of yesterday that number was sinking to just
93.65.
The level of the Canadian dollar greatly affects our economy – imports
and exports – interest rates and consumers’ interest in crossing the border to
shop.
The 93.65 score is a three-year low, actually dating back to May of
2010.
I don’t believe our economic machine works well unless our dollar is
95 or lower as too many jobs are moving to the U.S. and elsewhere.
It is often a silly scenario as the U.S. economy was stagnant and the
government practically shutdown and a deficit in the trillions south of the
border, how is it possible that the Canuck dollar is slipping against that benchmark Lincoln coinage?
Read The Globe And Mail story as many factors are presented, but it
would appear an unchanged Bank of Canada interest rate (1.0) receives the most
blame for a sliding Loonie.
Gordon Isfeld in the Financial Post wrote, as he explained his
thoughts on Bank of Canada governor Stephen Poloz (pictured):
There are tentative signs that Canada’s economy is
picking up speed. In the third quarter of this year, growth increased by a
surprisingly strong 2.7% — though few economists expect that pattern to spill
over into the fourth quarter.Still, policymakers are forecasting the output gap — the difference between economic potential and actual activity — to close “around the end of 2015.”
That is the same timetable the bank sees for inflation to return to its 2% target — the midway point of its comfort zone of 1% to 3%. Statistics Canada’s consumer price index now sits at 0.7%.
Economists do not anticipate the bank adjusting rates an earlier than mid- to late 2015.
Economic numbers are always interesting to track and debate. As per usual, the links to published stories follow.
Mark
Schadenberg, Sales Representative
Royal
LePage Triland Realty
757 Dundas
St, Woodstock
www.wesellwoodstock.com
(519) 537-1553,
cell or text
Email:
mschadenberg@rogers.com
Twitter:
markroyallepage
Discussion
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