“Stephen Poloz sits in a boardroom at his alma mater, the University of Western Ontario, on a snowy afternoon in late February. The Governor of the Bank of Canada has just given his first public speech since shocking the financial markets with a completely unexpected interest rate cut in January. His address has thrown another curve ball, by pouring cold water on the market’s widespread assumption that he’s about to cut rates again at the bank’s next policy decision, just eight days hence,” writes David Parkinson and Barrie McKenna for the Globe and Mail on February 6th, 2014..
Parkinson and McKenna continued, “In an interview, Mr. Poloz is calmly explaining – again – why he’s not the reason the Canadian dollar is mired near six-year lows against its U.S. counterpart. But his frustration is seeping through. “The exchange rate depends on everything. The idea of actually choosing to put it somewhere is beyond concept. It’s completely contrary to how we think about how the economy behaves, and how monetary policy is best framed. “If people can’t buy that, and say, ‘Well, you’re just doing it to move the currency,’ I don’t know how else to explain it. It’s just economics.” As the words echo the room, a staffer checks what the Canadian dollar actually did since his speech less than two hours earlier. It’s up nearly a cent.”
Read the full article here.
Raymond Matt, CFP, CLU, TEP, CHS
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