Eric Theoret, a currency strategist and director at Scotiabank (TSX:BNS), says although the markets had been anticipating a rate increase from the central bank, it was not expecting Bank of Canada governor Stephen Poloz to express so much confidence about the move.
"As the adjustment to lower oil prices is largely complete", the bank said, "both the goods and services sectors are expanding". Meanwhile, the recovery in growth has been accompanied by solid employment and investment growth.
Mr. Poloz added a rate rise would also "reinforce efforts" among Canadian authorities to take some steam out of the housing market.
The Bank of Canada has warned that record debt combined with rapidly rising home prices pose a risk to the financial system.
The 0.25% increase to the key rate of the Bank of Canada will change very little for most people, say experts.
Even though Canada's jobless rate of 6.5 per cent is higher than Australia's of 5.5 per cent, it has been pretty consistently trending lower since it peaked during the global financial crisis. The Bank of Canada now forecasts 3% growth in second quarter before activity moderates in the second half.
"And so the tide begins to turn", Porter wrote in a brief note to clients.
Bank of Canada boosts interest rate to 0.75%
Campbell said this would not initially be a problem for consumers, but, she said, low savings and a lack of retirement planning could lead to more bankruptcies if rates rise again this year as expected. Despite the Bank's assertion as recently as January that another rate cut was "still on the table", top officials have growing more bullish about the economy.
The loonie surged after the announcement, with the Canadian dollar trading at levels not seen in almost a year, closing at 78.16 cents (U.S.).
As the Bank of Canada delivered its first rate increase since 2010, Fed Chairwoman Janet Yellen was testifying on Capitol Hill.
The loonie is soaring following the Bank of Canada's decision to hike its key lending rate.
A question that our central bankers were unable to resolve was why inflation remains so low. Stocks and government bonds rallied on the news. As the effects of these relative price movements fade and excess capacity is absorbed, the Bank expects inflation to return to close to 2 per cent by the middle of 2018. The Bank's indicator of future sales gauge hasn't been at this level since 2012.
The Bank of Canada's shift in stance marks a significant turnaround for the loonie's fortunes, which until early May, had been on a steady year-long downtrend versus its U.S. counterpart. Closing the gap tends to put upward pressure on prices and wages.
Despite the loss of the Canadian economy's fossil fuel engine - or maybe because of that loss - the bank is seeing plenty of signs that the wider economy is climbing out of its hole. Borrowers who are looking to refinance should be able to find five-year variable rates around the prime minus 0.40% to 0.60% range, which works out to between 2.10% and 2.30% using today's prime rate of 2.70%. Carney raised rates three times to 1%.
City's blind swimmer forced to beg in Berlin
From participation fee to lodging and boarding in Berlin, Kanchanmala had to arrange everything from the meagre amount she had. Goel, who immediately sought report into the incident from his officers in the ministry, said he also spoke to the PCI CEO.
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