Tightening U.S. monetary policy suggests that the Canadian dollar will remain weak. And in spite of competitiveness concerns, exports are rising enough this year to suggest 10 per cent growth, and an added 6 per cent in 2015. This in turn will spur business investment, lifting Canadian GDP growth to 2.8 per cent in 2015.
If you build it, he will come. In this case, "it" is not a baseball diamond, but a renminbi (RMB) hub, and "he" is not Shoeless Joe Jackson, but rather a business community eager to trade and invest in RMB. So far, the "build-it first" approach has paid dividends for Hong Kong, London, Taipei, and Singapore. Frankfurt, Luxembourg, Seoul, and a host of other jurisdictions are also showing initial promise after recently signing hub agreements. But will this approach work for Canada?
The tech wreck, the thickening border with the U.S. and the soaring loonie in the mid-2000's turned the attention of Canada's exporters to fast-growing emerging markets. In a relatively short time span, our trade with this rapidly-rising part of the global economy has risen from less than 5 per cent to almost 13 per cent of our merchandise exports.
Exporters are less upbeat about domestic economic conditions. The balance of opinion for this indicator was the only one to fall, edging back marginally to 13 per cent. Paradoxically, they are more positive about domestic sales, where the balance of opinion rose 9 percentage points to 43 percent of those surveyed.
Just over a year ago, markets went into a tailspin. At that time then-Fed Chairman Bernanke made what was supposed to be a benign announcement that gave new meaning to the word "taper." Currencies were thrust into the mayhem well ahead of the statement becoming action, as markets tried to anticipate the pricing effects of this new monetary regime. Tapering is now well underway; how are currencies weathering the storm?