|
Canadian DollarTuesday, September 28, 2004
Canada's solid economic and fiscal performance should help lift the Canadian dollar to 84-86 cents (U.S.) by the end of 2005.
Canada is currently experiencing the most favourable international economic backdrop in 30 years, with rising commodity prices boosting the ratio of export prices by 12 percent in 2 years, breaking the record set in 1975.
The Canadian dollar increased 22 percent against the U.S currency.
U.S. Public Debt has escalated since the terrorist attacks in September of 2001, with the deficit expected to reach $425 billion (U.S.) or 3.7 percent of gross domestic product (GDP) this year. The U.S. Federal Government Debt is likely to reach 3.75 percent of GDP, up from 35.1 percent in 2000.
Other factors favouring the Canadian dollar include the spread between the Canadian and U.S. interest rates, with Canadian yields remaining higher than the U.S. yields, encouraging investment in Canadian Markets.
The strength of the Canadian dollar bears watching. If we see the value reach 84 to 86 cents it would or could be an ideal time to take a look at U.S. assets.
|
