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How will the high $Canadian dollar affect mortgage rates?

The Canadian dollar is just about at par with the U.S. dollar…  The BMO Economist sums it up well when he says “Generally speaking, from a stronger currency, consumers win and producers lose.”  As quoted in the Vancouver Sun.

And a high Canadian dollar means the Bank of Canada is less likely to increase the Target Rate which affects Variable Rates…  Any move by the Bank of Canada upwards will only drive the Canadian dollar higher…
A high Canadian dollar hurts our exports as they become more expensive for other countries to buy…  and we will probably see more cross border shopping as our strong $CAD will have more buying power…
Bottom line is that Variable Rates appear to be safe for now… enjoy the low rates…

 

Canadian$ at par with U.S.$….Bonds over 3.00% first time since Oct. 2008

Canadian $ at par with the U.S. $

Today, the Canadian $ hit 100.12 cents briefly this morning…. A clear signal that the rest of the world is viewing Canada as having a very stable and solid economy…. Here’s an article with forecasts of the dollar remaining at these levels into next year….

But if the Canadian $ remains at these high levels, it puts pressure on the Bank of Canada not to raise the Bank rate as high or as quickly…. Any increase in the Bank rate will drive the Canadian $ higher…

5 Year Bond yields over 3.00%

The 5 year Canadian Bond yields jumped to over 3.00% for the first time since October 2008… That’s the same time the U.S. Sub-Prime mortgage crisis hit and the world fell into a recession.   Bond yields affect fixed rates…..current 5 year fixed rates are hovering between 4.19% and 4.39%… today’s Banks and Mortgage Lenders are looking for a 1.20% to 1.30% spread and we are that level… Further increases in the Bond yield will cause fixed rates to go up….

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