Canada, UK interest rates to remain unchanged (Australia)

Discussion in 'Economics' started by Wallace, Dec 7, 2009.

  1. but, housing's on the up so there may have to be a raise sooner


    and Australia's "business confidence rose 3 points to 19 in November, the highest since
    May 2002."
    "The domestic economy continues to show significant momentum," said NAB's chief
    economist Alan Oster. "Confidence continues to build and forward orders are now at
    their highest level since late 2007"
    "The RBA has since lifted rates again to 3.75 percent and investors expect further
    gradual hikes toward 5 percent in 2010."

    all via:
  2. I don't think Canada will raise rates until the Fed does. The appreciation in the CAD would be too much of a shock for Canadian exporters IMO. Mid to late 2010 perhaps.
  3. yes, but what i've heard/read is the Feds won't raise till 2011 if then
    and that will be too long for Canada to wait especially if unemployment
    continues to fall
  4. 1. Unemployment in Canada has fallen for two straight months (currently at 8.5%)

    2. How would raising rates help combat unemployment?
  5. 'Canada, U.S. job numbers point to firm recovery' by Paul Vieira Dec 5/09
    "OTTAWA - The so-far tepid economic recovery in North America might have taken its
    first big step forward in November as Canada's private sector went on a hiring spree and
    U.S. employers eased up on job cuts.
    "In Canada, the economy generated 79,100 jobs in the month - mostly in the service
    sector - reversing October's loss of 43,200 jobs and pushing the unemployment down to
    8.5 per cent from 8.6 per cent. The November job gain, announced Friday by Statistics
    Canada, was the biggest since September of last year, and supports the view of some
    economists that robust expansion is expected in the current quarter."

    not 'raising rates to help combat unemployment' - raising rates due to the strengthening
    economy reflected by continued rising employment
  6. Ah, I misunderstood your previous post. We're on the same page now.

    BOC will be able to hold off on raising rates until the Fed does unless inflation ramps up (caused partly due to the improved economic climate you mentioned). I just think that too big of a rate gap between Canada and US could cause the Loonie to skyrocket and cripple our exporters. BOC says their only objectives are inflation @ 0%-2% and full employment, but how can they not consider the currency impact in their decision? I suppose indirectly, the value of the currency effects full employment.
  7. Canadian exporters have been having it good since the late 1970s when the US$ began
    to rally, peaking in 1985 and since then declining, it's hardly a surprise that the windfall
    exchange rate profits have been evaporating, not to have that component of their business
    worked out is a failing for which they alone are responsible

    exporting has become a +/- benefit to employment, viz US manufacturers closing US
    plants and opening plants in Mexico, Japan opening US, Canada, UK etc auto plants
    in order to do business, NAFTA, ECU all speak to change within the Global Village -
    even the 'iron rice bowl' has disappeared, the best one can say is look to one's own
    resources, perhaps become a currency trader ;)