{"id":18081,"date":"2023-04-20T20:00:05","date_gmt":"2023-04-20T20:00:05","guid":{"rendered":"http:\/\/lynettelockhart.com\/client\/higher-us-fed-rates\/"},"modified":"2023-04-20T20:03:29","modified_gmt":"2023-04-20T20:03:29","slug":"higher-us-fed-rates","status":"publish","type":"post","link":"http:\/\/lynettelockhart.com\/client\/higher-us-fed-rates\/","title":{"rendered":"Higher US Fed rates &#8216;not a major concern&#8217; for C$, BoC&#8217;s Macklem says"},"content":{"rendered":"<p>By Ismail Shakil<\/p>\n<p>OTTAWA (Reuters) -The impact of higher U.S. interest rates on the Canadian dollar is not a &#8220;major concern,&#8221; and the Bank of Canada (BoC) would have to react only if there is a substantial depreciation of the loonie, Governor Tiff Macklem said on Thursday.<\/p>\n<p>Macklem, appearing before a Canadian Senate committee, was asked if the Federal Reserve&#8217;s continuing to raise rates could lead to the weakening of the Canadian dollar and hinder the BoC&#8217;s plan to tame high inflation.<\/p>\n<p>Typically, higher rates in the United States than in Canada would strengthen the greenback over the loonie.<\/p>\n<p>&#8220;That is not a major concern. We have an independent monetary policy, we have a flexible exchange rate,&#8221; Macklem told a Senate committee. In a floating exchange rate regime, a currency&#8217;s level is determined by supply and demand in the market.<\/p>\n<p>&#8220;It&#8217;s something we&#8217;ll have to take into account if the (Canadian) dollar were to depreciate considerably,&#8221; Macklem said.<\/p>\n<p>The Canadian dollar has weakened about 11% against its U.S. counterpart since June 2021, when inflation started to pick up, though year-to-date it is up 0.6% against greenback.<\/p>\n<p>The BoC raised rates at a record pace over the past year to cool inflation, and then became the first major central bank to pause monetary tightening. It has left its key policy rate at a 15-year high of 4.50% at its last two policy-setting meetings.<\/p>\n<p>The U.S. Federal Reserve, also fighting high inflation, has continued raising rates and is expected to deliver another 25-basis-point hike in May to take its key policy rate to the 5.00%-5.25% range, according to Reuters&#8217; poll of economists. <\/p>\n<p>&#8220;The Canadian dollar, it&#8217;s been reasonably stable &#8230; and largely that reflects the fact that the U.S. has also been raising interest rates very rapidly,&#8221; Macklem said.<\/p>\n<p>&#8220;I don&#8217;t see a big problem if the U.S. is going a little higher than us. I think that&#8217;s kind of already built into the market,&#8221; he said.<\/p>\n<p> (Reporting by Ismail Shakil; additional reporting by Steve Scherer in Ottawa and Fergal Smith in Toronto; Editing by Sandra Maler)<\/p>\n<p><a href=\"http:\/\/lynettelockhart.com\/client\/higher-us-fed-rates\/bank-of-canada-governor-tiff-macklem-takes-part-in-a-3\/\"><img decoding=\"async\" src=\"http:\/\/lynettelockhart.com\/client\/wp-content\/uploads\/Reuters_Direct_Media\/USOnlineReportBusinessNews\/tagreuters.com2023binary_LYNXMPEJ3J0SN-VIEWIMAGE.jpg\" alt=\"tagreuters.com2023binary_LYNXMPEJ3J0SN-VIEWIMAGE\"><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Ismail Shakil OTTAWA (Reuters) -The impact of higher U.S. interest rates on the Canadian dollar is not a &#8220;major concern,&#8221; and the Bank of Canada (BoC) would have to react only if there is a substantial depreciation of the loonie, Governor Tiff Macklem said on Thursday. Macklem, appearing before a Canadian Senate committee, was [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":18082,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[1213],"tags":[1223],"class_list":["post-18081","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-u-s-business","tag-updated"],"jetpack_featured_media_url":"http:\/\/lynettelockhart.com\/client\/wp-content\/uploads\/Reuters_Direct_Media\/USOnlineReportBusinessNews\/tagreuters.com2023binary_LYNXMPEJ3J0SN-VIEWIMAGE.jpg","_links":{"self":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/18081","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/comments?post=18081"}],"version-history":[{"count":2,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/18081\/revisions"}],"predecessor-version":[{"id":18306,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/18081\/revisions\/18306"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media\/18082"}],"wp:attachment":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media?parent=18081"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/categories?post=18081"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/tags?post=18081"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}