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 Posté le: Mar Oct 01, 2013 12:56 am Sujet du message: Fed decision to delay tapering good for dollar |
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{Fed decision to delay tapering good for dollar,[url=http://www.moncler-sale.org]discount moncler jackets[/url], lumber: economists}
U.S. Federal Reserve chairman Ben BernankeBy Glen KorstromWed Sep 18,[url=http://www.moncler-sale.org]moncler sale[/url], 2013 4:49pm PSTThe U.S. Federal Reserve’s September 18 decision to delay tapering its economic stimulus program is good both for the Canadian dollar and B.C.’s lumber sector, according to economists.Chairman Ben Bernanke had warned earlier this year that the Fed might start reducing its US$85 billion in monthly bond buying. Analysts had expected him to announce at the Fed’s meeting that monthly bond buying would fall to US$70 billion or US$75 billion immediately.When he announced at about 10 a.m. Pacific Time that the Fed was delaying tapering its stimulus, the Canadian dollar shot up along with equities.U.S. bond buying is essentially the country printing money,[url=http://www.moncler-sale.org]moncler down jackets[/url], which lowers the value of the U.S. dollar.The Canadian dollar finished the day up 0.7% of a cent to US$0.9783 after being down earlier in the day.A stronger dollar is both good for consumers who are able to buy more for their dollars and bad for manufacturers who export their products because they get less money when their revenue is repatriated into Canadian funds.“Obviously the equity markets turned positive,[url=http://www.moncler-sale.org]moncler on sale[/url],” said Helmut Pastrick,[url=http://www.moncler-sale.org]moncler sale[/url], chief economist at Central One Credit Union. “That is good for Canadians through their RRSP accounts and it is good for businesses who are more able to tap into equity markets to raise capital.”U.S. exchanges such as the Dow Jones Industrial Average and the S&P 500 closed at record highs and U.S. homebuilder stocks led the rally.“B.C.’s economy will be impacted most through the lumber channel,” said Ken Peacock, British Columbia Business Council’s chief economist.He explained that delaying tapering means a delay in the Fed raising its overnight lending rate. That will cause bank interest rates to stay flat or rise slower than if tapering were to take place.That in turn makes housing more affordable for Americans, who will be able to afford mortgages easier. When housing stock diminishes,[url=http://www.moncler-sale.org]discount moncler jackets[/url], demand will increase for new homes, spurring demand for B.C. lumber, Peacock said.Both Pastrick and Peacock, however, believe that there is a caveat.“One could view the Fed decision as somewhat negative, in that the Fed views the U.S. economy as not strong enough in its prospects, not good enough that it can step back on this monetary stimulus,” Pastrick said.“That sends a negative message because the B.C. economy is helped if there is a strong economy in the U.S.”gkorstrom@biv.com@GlenKorstromTags: economy,[url=http://www.moncler-sale.org]moncler on sale[/url], Helmut Pastrick, stocks,[url=http://www.moncler-sale.org]moncler outlet[/url], United States,[url=http://www.moncler-sale.org]moncler outlet[/url], British Columbia Business Council, central bank, consumers, interest rate, mortgage,[url=http://www.moncler-sale.org]moncler down jackets[/url], U.S. Government
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