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2007 was a Great Year for Canada

The Canadian dollar soared to record-breaking heights hitting parity with its U.S. counterpart for the first time in 30 years in September. It hit a high of $1.10 in November and has now settled to $1.0088 – rising about 18 per cent this year.

Canada experienced unparalleled growth in every quarter and even though the rising dollar hurt some areas of the manufacturing sector, overall it has caused a boom for consumerism and travel. The loonie benefitted from record prices for uranium, aluminum, base metals, wheat, corn and other commodities, as well as soaring fossil-fuel prices.

To add to our optimistic outlook the economy is running at full capacity with relatively low core inflation, solid income gains, as well as unprecedented levels of employment and our healthy housing market caused by both first-time home owners and high immigration levels.

The S& P/TSX finished off the year with a small gain of about 7 per cent for the year. A disappointment from the 14.5 per cent gain we saw for 2006 but a relief after the pessimistic news coming out of the U.S with the sub-prime credit crunch that heavily affected the stock markets.

The consensus is that rates will see a modest interest-rate reduction.

It is expected that the U.S. will lower their interest rates in order to avoid a recession, given the sub-prime meltdown and the volatility south of the border.

It is expected that The Bank of Canada will probably follow suit and cut interest rates by 25 basis points in early 2008 with a possible second cut further in the year to a maximum of 50 points. It is not expected to embark on a major rate-cutting campaign due to our overall strong economy, and our low unemployment rate.

All indications point to a strong 2008…

Posted on Wednesday, January 2, 2008 at 10:48PM by Registered CommenterElaine | CommentsPost a Comment

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