Sign of the Times: The Loonie to Overtake the Greenback

A Canadian economist for sees by this summer the Canadian Dollar otherwise known an as the Loonie will be higher in value versus the US Dollar. The Loonie and the greenback are at parity.

Avery Shenfield, Chief Economist with Canadian Imperial Bank Canada says the Canadian Dollar has increased in value over the US dollar by a few cents. But their talk that the Bank of Canada the Canadian central bank is expect to raise the interest rate by July.

The Bank of Canada “is out in front of the US Federal Reserve by a couple of quarters” in raising interest rates, the Canadian dollar could reach 1.02 dollars versus the US dollar by September, before dipping back to 0.97 dollars by year end,” Shenfeld said.

The Bank of Canada has kept the interest rate low at .25 percent to help the battered economy officials are reviewing the policy.

Another factor for the expected strengthening of the  Loonie  the increasing demand of  Canadian products such as oil, fertilizers, and minerals…

“If the capital markets finally get an appetite for M&A (mergers and acquisitions) then Canada could be one of the first places to see the benefit of foreign inflows,” said CIBC analyst Zafar Bhatti.

Or “if the investing world starts looking for a place to park capital in the wake of deteriorating sovereign credits then Canada would look very attractive,” Bhatti said in a report.

Yahoo Finance News


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