The Canadian overnight loan rate was raised to 50 bps from 25 bps. This was expected given that Canadian economic growth is coming in faster than the US. Inflation has been modest and there is a potential problem with rising real estate prices. Most comments suggest that central bank governor Mark Carney is taking a cautious approach. The BOC is the first of the G7 to raise rates.
While the Canada dollar has been off its high, it may be the preferred currency for many countries that want to diversify its reserves. It has a stronger fiscal balance sheet than many of the other G20 countries, good governance, and strong natural resources.
While the Canada dollar has been off its high, it may be the preferred currency for many countries that want to diversify its reserves. It has a stronger fiscal balance sheet than many of the other G20 countries, good governance, and strong natural resources.
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