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.