This morning’s Canadian GDP numbers added further fodder for the Bank of Canada to contemplate a rate hike. The big drawback is that it would cause the Canadian dollar to get even stronger to the USD. It’s a case of damned if you do and damned if you don’t. A too strong Canadian dollar impacts Canada’s export markets, particularly in the manufacturing sector are becoming more expensive, especially in the auto industry. U.S. auto makers will likely explore other options that are cheaper leaving Canadian manufacturers in the lurch.
Oil prices are at three year highs, whether this increases government coffers remains to be seen, the CAD equivalent for $67.75 USD is $81.57 CAD, the 2020 high was $63 USD, CAD equivalent $84.42, so in terms in if CAD, oil prices have yet to exceed last year’s highs.
Expect a narrow range today.
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