馃攳
The loonie will outperform versus the Euro and British pound sterling: Currency analyst - YouTube
Channel: BNN Bloomberg
[0]
well the canadian dollar is rallying
[1]
against the us dollar against the
[3]
british pound sterling and against the
[5]
euro among other international
[6]
currencies on the unexpected rate hike
[9]
from the bank of canada unexpected
[11]
because the bank has raised its
[12]
benchmark interest rate by a full
[14]
percentage point rather than the 75
[16]
basis points that markets were expecting
[18]
joining me now is kathy lean she's
[20]
managing director of bk forex kathy
[23]
thanks a lot for joining us what's your
[24]
uh your early take away from the bank of
[26]
canada's dramatic
[28]
announcement i think there's no question
[31]
that the bank of canada wants to get
[32]
ahead of the fed they you know are
[35]
looking at the inflation numbers that
[36]
came out from the u.s um this morning
[39]
they're looking at their own levels of
[40]
inflation and they're realizing that the
[42]
fed needs to be um very aggressive and
[45]
that's going to strengthen the u.s
[46]
dollar and make the canadian dollar
[49]
weaker which will exacerbate their own
[51]
inflation pressures at home and that is
[53]
why i think you know the bank of canada
[55]
decided to front load the um tightening
[58]
they were they were going to space out
[60]
across the year because they wanted to
[62]
make sure that when the fed is ready um
[65]
to hike that they too have have lifted
[67]
rates aggressively
[69]
minimizing the potential ups the special
[72]
downside in the canadian dollar that
[74]
would make inflationary conditions
[76]
domestically worse interesting so
[78]
while central banks of course never
[80]
publicly say that they make their rate
[82]
decisions based on currency
[84]
considerations you think that was a
[86]
factor here
[88]
i think that the weakness of the
[90]
canadian dollar is definitely adding to
[92]
the pain of rising inflationary
[93]
pressures and making it very difficult
[95]
to reverse that trend and with the
[97]
federal reserve you know expected to
[99]
possibly you know do the same amount at
[101]
their next meeting the i mean before
[104]
this it was 75 basis points now they're
[105]
talking about 100 basis points that i
[108]
think the bank of canada really want to
[109]
get ahead of all this so currency
[111]
factors while it's not supposed to be in
[112]
play you know have a very uh fundamental
[115]
impact on inflation and therefore has to
[117]
be an input in the central bank's
[119]
decision does uh this news affect your
[123]
mid-term or longer-term view on the
[125]
canadian dollar
[127]
i think that we really have to listen to
[129]
what the governor says because you know
[131]
there's a lot of um little changes in
[133]
the bank of canada statement that
[135]
suggests that they potentially could
[137]
slow down from here like for example
[140]
they removed the the language that said
[142]
they will have to continue to move
[143]
forcefully going forward um they're
[145]
still committed to rate hikes but by
[147]
ruining that word forcefully and
[149]
recognizing that you know growth um will
[152]
slow um in the in the coming months
[154]
globally is a sign that they could
[156]
potentially um slow down however if the
[159]
governor um just kind of laser focuses
[161]
on inflation and really downplays the um
[164]
risk to global growth in the um in the
[167]
months ahead then i think you know the
[169]
rally in the canadian dollars intact
[171]
overall though you know in terms of
[173]
canadian dollar you know the battle
[174]
between the greenback and the canadian
[176]
dollar is going to continue it's going
[178]
to go head-to-head um i still think you
[180]
know the the the canadian doll may see
[182]
some weakness but against the other
[184]
currencies like you said sterling euro
[187]
the australian dollar i think the looney
[189]
is going to continue to outperform
[192]
that was my next question actually the
[193]
canadian dollar trading i believe now
[195]
gets at its highest level ever versus
[198]
british pound sterling and its highest
[201]
level versus the euro i i believe in
[203]
close to 20 years you think that and we
[206]
know of course that that before today
[209]
the canadian dollar had outperformed all
[211]
of the g7 currencies with the exception
[213]
of the us dollar that's something you've
[215]
got to understand when you see the
[216]
canadian dollar trading in 52 week low
[219]
territory versus the greenback you think
[221]
the outperformance of our currency
[222]
versus other key domestic currencies
[225]
will continue
[226]
i think so because there's a lot of
[228]
headwinds in different parts of the
[229]
world that canada is less subjected to i
[232]
mean basically in europe you've got that
[234]
energy crisis you have um the risk of a
[237]
greater risk of recession you have the
[239]
bank of england already noting that you
[241]
know perhaps they need to slow down
[244]
and do fewer rate hikes going forward so
[247]
i think you know that's going to make
[249]
looney more appealing versus those
[250]
currencies down under you know china
[253]
still dealing with um their covert war
[256]
and you know that's going to weigh on
[258]
australian growth especially if they
[260]
continue to clamp down hard on
[262]
restrictions so you know there's certain
[264]
factors affecting other parts of the
[266]
world that canada is less affected by
[269]
and unless until unless that changes i
[271]
think the canadian dollar will continue
[273]
to outperform
[275]
the bank of canada release was not the
[277]
only dramatic release of the morning we
[279]
also had the u.s inflation print in the
[281]
united states
[283]
excuse me where inflation rose by 9.1
[286]
percent what is your view of the fed and
[288]
the fed's uh coming response
[291]
i think the fed has it been
[293]
unambiguously hawkish and you know i
[296]
don't necessarily think that they had
[298]
been considering a her a full one
[300]
percent rate hike um prior to the cpi
[303]
report i think they'll still um opt for
[306]
a smaller move maybe somewhere in
[307]
between like 75 basis points but i think
[310]
you know overall inflationary conditions
[312]
um are hot and any um any like
[316]
speculation of inflation peaking i think
[319]
has really um been killed by the latest
[321]
cpi because even if inflation is peaking
[323]
it's peaking at such a higher um uh
[326]
level that it's going to take a very
[328]
long time for it to you know descend
[331]
from from where it needs to be back to a
[333]
more comfortable level for american
[335]
consumers
Most Recent Videos:
You can go back to the homepage right here: Homepage