Weakening Trend Likely Ready To Resume for Canadian Dollar

(This is an excerpt from an article I originally published on Seeking Alpha on April 21, 2013. Click here to read the entire piece.) On April 17th, the Bank of Canada decided to leave interest rates unchanged. In its Monetary Policy Report Summary, the Bank of Canada extended out its forecast to mid-2015 as the … Read more

Canadian Dollar Quakes After Carney Warnings And Ahead of Next Rate Decision

(This is an excerpt from an article I originally published on Seeking Alpha on October 21, 2012. Click here to read the entire piece.) {snip} Since at least 2010, Governor Mark Carney has consistently warned Canadians that interest rates are abnormally low and must inevitably go up. However, Carney has also made it clear that … Read more

Bank of Canada’s Base Case Straps Its Dollar Around Parity With U.S.

Currency traders appeared very disappointed that the Bank of Canada left interest rates unchanged on Tuesday. The Canadian dollar (“loonie”) immediately bounced sharply from near three-year highs against the U.S. dollar, and the USD/CAD eventually popped over parity (1.0) for the first time in two weeks on Thursday. The accompanying statement suggested that the Bank … Read more

Mark Carney Speaks Plainly About the Role of Canada’s Central Bank

Mark Carney, the governor of Canada’s central bank (Bank of Canada), must be one of the most relaxed central bankers in the Western world. In an interview posted on Paul Kedrosky’s website (minutes 9 to 35), Carney admits that his job is easy compared to the task still facing many of his contemporaries. For example, … Read more

Bank of Canada Confirms Carney’s Caution

On Tuesday morning the Bank of Canada decided to leave its overnight interest rate unchanged at 1.0% and confirmed the caution expressed by Governor Mark Carney on CNBC almost a month ago. The concluding paragraph in the statement on monetary policy summarizes the Bank’s concern about current economic conditions: “At this time of transition in … Read more

Will the Real Safety Currency Please Stand?

In “The Dollar Is Headed Lower“, Randall W. Forsyth wrote in Barron’s that “The dollar’s trend now is unequivocally lower. And that’s apparent whether you look at fundamental factors or the technical picture on the charts.” He does a good job of summarizing the current condition of de facto competitive devaluation that is increasing the … Read more

The Bank of Canada Continues to Lament Its Strong Currency

No new news in the Bank of Canada’s decision to maintain its overnight rate target at 0.25% and to start increasing this rate at the end of next quarter. The Bank of Canada continues to lament the stubborn strength of its currency despite these rock-bottom rates: “…the persistent strength of the Canadian dollar and the … Read more

Strong Currency Extends Bank of Canada’s Forecast for Full Recovery

Yesterday, the Bank of Canada decided to maintain its exceptionally low interest rate of 0.25% and reiterated its commitment to hold rates this low until the end of the second quarter of 2010. This move stands in stark contrast to the rate increase implemented by Canada’s similarly resource-rich “G20 cousin” Australia just two weeks ago. … Read more