Bank Of Canada In A Tight Spot
When the Bank of Canada is not doing great, the currency exchange Montreal is also affected. Recently, investors have been pricing because of the two consecutive increases in the rate that is expected to be announced by the Bank of Canada for 2018. The manager of a Toronto-Dominion Bank’s unit worth $355 billion CAD is not in agreement though as one increase in rate might not even be possible.
According to TD Asset Management’s chief executive as well as chief investment officer, Bruce Cooper, he is not currently seeing any engines that might help to accelerate the current economy of Canada. In the event that an increase in rate is initiated by the central bank before the end of the year, this can only happen once. In terms of the United States Federal Reserve, they will increase the interest rates by around twice of the original figure for 2018 and the same thing will be decided for 2019.
Cooper explained that the gap will continue to increase which will result to a heavy weight to be pulled up by the currency.
Governor Stephen Poloz of the Bank of Canada was a part of the meeting to discuss the rate decision this week and many are expecting that he will not allow elimination of the borrowing costs for three consecutive meetings. The bank has already made its policy stricter than before in three occasions beginning at the middle of 2017. This is the reason why the benchmark rate has already reached 1.25 per cent.
Cooper said that there is a slowing down in the case of real estate, there is not enough investment in the oil industry and the trade is not as certain as before. These are all factored in thus the bank will not be able to make the decision for a rate hike as expected by the market.
Another thing that might impact the currency exchange Montreal is the provincial election which is happening in Ontario and could have an overall impact to the current standing of the Canadian dollar in the currency market.The result might not be a good one if the Ontario New Democratic Party is to win the election.