Major News For The May-3 Week
The National Bank of Canada | Jun 04, 2013 08:31AM ET
Last Wednesday, Mark Carney gave his last speech as Governor of the Bank of Canada. He said that the Bank’s monetary policy should remain stable for some time, with the key interest rate at 1%. He also acknowledged that the Canadian economy has been growing faster than the Bank’s most recent forecasts. This was confirmed on Friday with the release of the Gross Domestic Product figure for the first quarter of 2013; it was 2.5% (annualized), which was higher than expected. The main reason was growing exports of crude oil products to the U.S. On Thursday, the International Monetary Fund scaled back its growth forecast for China, from 8% to 7.75%, and on Friday we learned that the economy of the eurozone has not improved, and its unemployment rate has reached an unprecedented 12.2%.
The Loonie
Last week proved to be highly eventful, and the month that ended on Friday was full of surprises for the Canadian dollar. The loonie failed to reach parity in early May and now opens the month of June at its highest level against the greenback seen in 12 months. Looking only at the foreign exchange markets, one could conclude that very little has changed over the last year, but in fact Canada’s economic landscape has been transformed over the last few months. The Canadian economy, which held an enviable position among the world’s developed countries, seems to have lost ground vis-à-vis our trading partner to the south. We will therefore take a brief look at Canada’s economic track record.
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