DislikedSomehow I think you're both right in some way - loonie can act like crazy but fundamentals also matters. Anyway, I've learned in a hard way that future expectations matters the most or I should say fundamentals tomorrow, not today. I don't know what are the exact intentions of BoC or FED, just expect some action from them but if the expectations are that FED would hike rates before BoC or USA would become much more energy independent int the future, then maybe the present numbers don't matter so much. If it was that Canadian GDP > USA then I suppose...Ignored
US is not going to raise rates any time soon...even if the economy is improving... (its too soon)
Here are two excerpts from Ex chair Greenspan... "false dawn". From a very personal biased view - it is not in the interest of central bankers and the corporate elite to raise interest rates because they want to fuel growth and promote "healthy" inflation... Inflation leads to asset appreciation (something) that they want to have for the foreseeable future because that will bring back confidence on main street; as they will start viewing the asset appreciation in the housing market as a time of repurchasing and perhaps then the entire housing market boom will kick start again (hopefully) without the very easy mortgage boom this time.
From a canadian perspective if you heard Polov's last statement...he is in no mood to increase interest rates (low interest rates is the new norm for a very very long time to come...as that will work to get the cad unemployment rate down and promote much needed growth)
Also we must keep in mind that the canadian government was heavily relying on the keystone pipeline project...but with the advent of shale gas and the environmental assault "lobbying" by steyer... that seems unlikely for the foreseeable future... Hence Canada has to promote service growth and that will only come with low interest rates...