Next rate increase will be affected by trade.

The Bank of Canada is watching fluctuations in CAD dollar, brought on by international trade talks. Bank representatives mentioned that growing Canadian dollar has brought on the interest rate increase. The Canadian economy is strong and growing stronger, however, concerns exist regarding possible changes in trade policies.

Yesterday Timothy Lane, Deputy Governor, made several comments about the Central bank recent policies and Canada’s economic future. Recent changes in monetary policy were strongly influenced by the economic growth, strong exports and growing business investments. The Bank of Canada announced that it will be closely watching fluctuations in the Canadian dollar, and making reasonable adjustments in the interest rate.

 

 

The Canadian dollar has grown stronger in the past several months, increasing by more than 10 per cent. Experts expect the central bank to keep raising interest rates, adapting them to the growing economy. In the past several months the central bank has already hiked its target interest rate twice.

Canada’s international trade received a lot of attention in Timothy Lane’s speech. Lane believes that international trade is key to success for the Canadian economy. However, he brought up an important concern, which may impede economic growth for the nation. Currently, Canada’s major trading partners are demanding new trade barriers and more of a protectionism approach to trade. Protectionism policies may affect Canadian economy and halt the growth. Negotiations about changes to NAFTA agreement are particularly important for Canada’s economic outlook. The talks about changing the agreement were initiated by Donald Trump this summer. If rules are changed in an unfavourable way, Canada might see lower external demand for exports and slower economic growth in the future.

Currently, Canadian dollar is looking strong, up 10 cents since spring time. Third central bank meeting is coming up in October, and expert opinion splits on whether more rate increases are coming. Although strong and stable, the Canadian dollar dropped by one cent after the recent Lane comments. Currently it sits at $1.2318 CAD per US dollar.

At this moment it is unclear whether new rate increases is coming up, and borrowers with variable rate loans are holding their breaths. At the same time we don’t anticipate hawkish movements going forward, therefore proper mortgage planning will save our clients thousands of dollars. During the time of economic uncertainty it is important to get help and professional advice from the most reliable teams on the market. Home and Mortgage Advice has received excellent feedback on their 10 years of work with clients all over the GTA. Our team provides mortgages and refinancing at the most competitive rates, and always looks out for the best solution suitable to your personal needs. Contact us today to inquire about the best options for your mortgage or investments.

  • stress test

    New OSFI stress test for uninsured mortgages

    New stress test will affect borrowers with down payments of 20 per cent and over Today is the big day – Canada’s main banking regulator just released the much anticipated final version of Guideline B-20. The revised guideline contains descriptions … (read more)

  • toronto real estate

    Housing market cooling down

    The real estate market in the GTA is in the process of slowing down after a period of peak activity. Experts predict that the trend will not change until the end of the year. What does the housing market cooling … (read more)

  • rate increase

    Next rate increase will be affected by trade.

    The Bank of Canada is watching fluctuations in CAD dollar, brought on by international trade talks. Bank representatives mentioned that growing Canadian dollar has brought on the interest rate increase. The Canadian economy is strong and growing stronger, however, concerns … (read more)

  • interest rate increase

    Bank of Canada rate hike

    Bank of Canada introduced new interest rate increase Big news hit the market on Wednesday morning. Bank of Canada revealed an interest rate increase, its target overnight rate rose to 1 per cent. Canada’s biggest banks will in turn raise … (read more)

  • Stress test impact on Canadians

    What does stress test really mean for Canadian home buyers? Mortgage Professionals Canada have recently released a study meant to estimate the usefulness, – or harm, of stress test policy. MPC looked at the percentage of home buyers whose buying … (read more)

  • interest rate increase

    Interest rates are about to increase

    Bank of Canada dropping hints about the approaching interest rate increase. Canadians have enjoyed incredibly low interest rates for many years in a row, and grew accustomed to this state of events. However, it looks like interest rates will not … (read more)

  • air_bnb_toronto

    New rules target short term rentals

    The City officials announced proposed changes to Toronto short term rentals market, including Air Bnb. A new proposal came out, targeting Toronto’s short term rental market, including properties rented on Air Bnb. Toronto mayor John Tory claimed that new rules … (read more)

  • canadian-mortgage-increase

    Canadians can’t withstand increases in mortgage payments

    Most Canadian home owners would not make it through a 10% increase in mortgage payments   Manulife recently performed a survey, which found that many Canadian home owners are barely making their mortgage payments. The bank surveyed 2,098 home owners 20 … (read more)

  • improve_entering_housing_market

    Real estate headlines turning home buyers away?

    Media messages prevent Canadians from buying homes Current market conditions do not follow clear trends or allow for reliable predictions. The headlines seen in the media are scaring many potential home buyers away, even though the home prices were consistently growing … (read more)

  • Home affordability crisis boosts renovation

    Home affordability crisis triggers increased spending on home renovation projects   After the tightening of mortgage rules in 2016 economists predicted that limited real estate supply and tough competition will cause influx of funds into home renovation projects. Recent reports from the beginning … (read more)

  • Capital gains tax avoidance targeted

    BC court targets capital gains tax avoidance Big news shook BC real estate market this month. A new BC Supreme Court ruling finally targets a weak spot in the Canadian legal system: capital gains tax avoidance. Non-strict rules about the … (read more)

top