** This is one that Adam prepared over the week-end
The Huffington Post writes about Bank of Canada Governor Poloz’s secret plan to sink the loonie.
It’s a theory from CIBC chief economist Avery Shenfeld, not a ‘secret plan’ but it’s still good reading.
Shenfeld says Poloz’s hints that the bank won’t be raising rates anytime soon are meant to take the steam out of the loonie. (Traders tend to ditch a currency if they think that country’s interest rates are headed down.)
A “phantom rate cut, one hinted at but never delivered, carries much less risk [than an actual rate cut], and could be used to weaken the Canadian dollar to provide stimulus where it’s wanted, in the export sector,” Shenfeld writes.