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Bank of Canada Update
Bank of Canada Update
Bank of Canada UpdateThe Bank of Canada is expected to keep its key overnight interest rate at one percent for December 2010 as growth remains stagnant in the North American nation. Unemployment has been dropping in Canada and the country's employment rate has been rising in conjunction with this. However Canada's largest trading partner to the south (the United States) has not been faring so well, this of course has negative consequences for Canada in that much of its wealth exists as US dollars.
While Canada's political and economic systems are independent in many ways and are very different than those in the United States some things cannot help but be dependent on one another. The US GDP, unemployment rate and many other factors all have an impact on the nation of Canada and can impact the value of its currency as well. The correlative link can also be seen when US currency moves in a certain direction Canadian currency also tends to move along with it. Moreover Canadian bonds tend to move with US treasury values.
This type of symbiotic relationship ensures that Canada remains enmeshed within the affairs of America and in turn American foreign interests as well. This type of relationship of course necessitates a close look out on the part of traders for both the movement of the USD and the CAD. However often there is much more at play than simply the value of a given currency, unemployment, GDP and a slew of other factors can have consequences for both the US and Canada.