Canada column for Sunday, Jan. 27/13
THE CANADIAN REPORT
(c) By Jim Fox
The Canadian dollar has fallen to below parity with the U.S. currency after the Bank of Canada said super-low interest and inflation rates will continue.
Canada’s central bank conceded that it misjudged the strength of the economic recovery and reduced its outlook for inflation.
This caused the dollar to dip to a six-month low near 99 cents US as the trend-setting interest rate is likely to remain unchanged for the rest of this year.
The central bank rate is one percent where it has been for more than two years.
“The direction is clear – the timing has shifted,” bank governor Mark Carney said, noting a “less imminent” need to raise rates.
The bank is “less worried” now about high levels of consumer debt and the housing market while inflation will remain around one percent.
Prime Minister Stephen Harper said weaker growth for the global economy is “obviously a concern” and will have an impact on the pace of job creation.