Interest Rates Rise

So I'm not afraid to admit when I was wrong and I was wrong about the interest rate not going up any time soon. Yesterday the bank of Canada raised the interest rate .25% and the dollar dropped nearly a penny because of it. However, within 24 hours the dollar had recovered. The interest rate differentiality between Canada and the US dollar will only serve to void the value o the Canadian dollar. I suspect that our dollar will rise to a $1.03 by the end of June not withstanding the Bank of Canada purchasing a whole lot of American dollars in an effort to prevent our dollar from rising.

The over all effect will be to increase the value for both the Canadian and US currencies relative to the rest of the world. One could expect the Euro to drop below $1.25 and the pound to drop below a $1.50 Canadian. What does this all mean to the consumer? It means that the Canadian economy will slow down substantially

David Crick

David Crick

CENTURY 21 Bamber Realty Ltd.
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