Canadian and Australian Dollars May Rally Further

Since the beginning of March, both the Canadian and Australian dollars have appreciated significantly against the U.S. dollar. In fact, since March 6, the Canadian dollar appreciated nearly 13 percent against the U.S. dollar and the Australian dollar a stunning 21 percent. A spike in commodity prices triggered by a recovery in global demand helped to boost these currencies and at Trading Economics we think they are likely to strengthen further in the next few months.
Anna Fedec, 5/23/2009 2:44:52 PM

Canada’s Banks Earned More than C$12bn in 2008

The Canadian economy experienced negative GDP growth in the last quarter of 2008. However, is in better shape than many developed countries. For instance, the nation’s 21 banks earned more than C$12bn last year and needed no bailout. More importantly, the government and the central bank have taken measures to improve credit availability and spending. The overnight interest rate was cut to 0.25 per cent and a C$40bn fiscal stimulus package was introduced at the end of January. The trade balance moved into deficit in December and January, but has since rebounded into the positive territory.

 Australian Exports to China Will Rebound in 2009

Higher commodities prices and the rebound of demand for metals in China has been giving a big boost to the exports oriented economy of Australia. And although aussie exports are down from last year highs, they are still above its long-term average. More importantly, a considerable stimulus package and the ongoing monetary policy easing will definitely support the recovery in the next few months. In fact, since last September, 425 basis points have been waived from the benchmark interest rate and unlike in many other countries, the bulk of this reduction has been passed on the households. Moreover, household spending is being boosted by tax bonus payments and government transfers. For example, in March and April consumers received as much as A$950 ($705) in cash handouts and household disposable income was up 10 per cent in real terms.