The Canadian dollar is holding fairly steady. Looking ahead, we're not getting too much economic news until next week.
It's suggesting this structural change playing out in the U.S. economy seems to still be continuing.
We saw most of the indicators move up in the month, with the exception of the prices paid index, which generally provides an indication of strength in activity.
The Canadian dollar is doing fairly well this morning, in part because of a generally weak U.S. dollar. Canada is also being helped by oil prices remaining high, as a result of political instability in a number of the producing areas.
So at the moment, markets generally assume the Fed will continue to tighten. That expectation is generally resulting in the U.S. dollar strengthening, though the Canadian dollar seems to be holding its own.
Despite solid growth, inflation is quiet which is reflected in low bond yields.
Recent comments by Fed officials on indications that the U.S. economy had a fair bit of momentum going into the natural disaster seems to have resulted in the consensus of the Fed continuing to hike rates.
Bubble conditions may not be present yet but are approaching such and thus require close monitoring going forward. To allay this concern, housing price increases will need to start to moderate soon from recent sharp increases. Our expectation is that this should occur, since rising mortgage rates should slow the growth in housing prices to a rate below gains in income.
The currency is pretty steady, with markets remaining fairly thin with little economic data. We're awaiting deeper markets, plus the release of employment reports for both Canada and the U.S. next week.
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