Alan2005

Exactly. The way the use CPI to adjust interest rates amplifies the cycle rather than dampens it.

cyclopes

Okay, need some positive movement here in the short term - closing on our house in two months.

Can everyone hold off buying crude oil for a few months please?

CanadaJimmy

I have a theory that the Canadian Government tries to keep the CAD low by "suggesting" inflation. The 10pc rise in the cost of Monthly Transit Passes came right at a time when the CAD was touching the USD. I could be wrong but I wonder if anyone has noticed any similar tricks like that.

Alan2005

That's putting the cart before the horse just a little.

Alan2005

GBP/CAD up 8c or so in the last week.

JamesM

Yes. The current rate was never sustainable. Long may it continue.

loser40

Hi..

Yeah, just out of curiosity I've been watching the exchange rate too.

If memory serves me right the EU & Canada have begun trade talk agreements, and the exchange rate needs to increase a lot further to make Canadian products & services appealing to Europeans - so maybe this, with the recent UK emergency budget are helping things.

M.

Alan2005

The plan to cut the UK deficit is helping as is the weakness of the US economy.

loser40

...and the current strengh of the US dollar makes Americas products and services expensive for the UK & Europe too, so it's strengh may also slide.

paolosmythe

....which in turn was helped greatly by a useless football team invalidating the need to import more 'EN-GER-LAND' paraphernalia from China and Co.

loser40

...also a new influence on the international exchange rates will be China's decision to unpeg it's Yuan from the US dollar - I don't know how this is going to effect sterling and the Canadian dollar.

oicur0t

The price has broken through a range ceiling that it's been under since March, around 1.56 and it's been quite a strong break, so the trend is definitely upward.

Alan2005

Through a range ceiling eh?

TheBear

I've been very bearish about the pound in the past, and long term, I continue to be, but now the new Government has shown it is willing to grasp the nettle, I think we could see it head back towards 1.90 or even 2.00 over the next 6 months. Depending on what happens with the Canadian economy it could stay there a long time before the looming long term energy crisis makes Canada one of the stronger economies in the West, then I think the pound may decline again, even beating current lows. But that is a long way off.

Yelkcub

Valid points - I think that the lack of a manufacturing base is also a major issue that will begin to affect the UK in due course.