Over the past few weeks, all the hoopla and speculation whether Stephen Poloz Bank of Canada chairman has purposely weakened the Canadian dollar via his commentary whether or not Bank of Canada Interest Rates wil rise or fall? Can Mr. Poloz change previous monetary policies with a new path??
The answer…most definitely..we have to trace back to Stephen Poloz Bio and his employment history, 14 years with the Bank of Canada from 1981-1994 and in 1999 joining the BDC (Business Development Canada) where he became President and then CEO in 2010. Mr. Poloz has the “finger on the pulse” yet in the game of world central banks, he is just a “pawn” in scheme of a bigger picture.
The U.S. FED will dictate their monetary “mantra” to others and leave an unlimited timeframe for others to follow. We have seen this pattern amongst other nations and now Canada has decided to follow the “pied piper”…whatever tune the “Yellenator” plays..the rest follow.
Canadian exporters have been begging for this recent fall for the CAD, yet previous chairman Mark Carney now chairman of Bank of England never participated. The question, is this current move more to do with dovish commentary or stronger U.S. data causing the weakness. Remember, Canada Exports by Country 85% tied with the U.S. The bigger picture, manufacturing in Canada will not claw back gains from a weaker CAD, Caterpillar, Heinz Canada have shown that to operate in Canada is costly, both organizations have brought business back to the U.S. or Mexico. Overall the U.S. cannot continue to inflate their economy to infinity. Sooner or later the game ends, the question is…which economies will remain resilient after the monetary game subsides??