Foreign Currency Exchange

In an update to April’s monetary policy report the BOC said,

• They see inflation peaking at 4.3% in the first quarter of 2009.
• They see annual 2008 growth at 1% down from an earlier projection of 1.4%.
• The BOC also mentioned that they were not poised to raise rates and that the 3% interest rate remains appropriate.

This week’s Canadian housing survey is expected to show a slowdown, however the slowdown is forecasted to be mild compared to the problem the US housing market is going through, with house prices still expected to rise this year.

On Thursday 17th of July BOC governor Mark Carney said Canada’s financial system is strong and credit conditions have returned to somewhat normal levels, on inflation he said a $10 drop in oil will reduce Canada’s headline inflation by 0.2%
The Foremost Currency Group is expecting GBP/CAD to remain range bound between 1.97 & 2.03 as conditions in both the UK and Canada look bleak. Higher interest rates in the UK should support the pound, while the Loonie is currently supported by commodities and their robust housing market.