ABC - Current Industry News
Economy picking up steam, Flaherty says
2009-12-03 - Globe and Mail
Canada's economic growth rate should be a little rosier in the remainder of this year and in 2010 after a tepid performance in the third quarter, Finance Minister Jim Flaherty said Tuesday.
Flaherty played down potential threats to the recovery, such as the Dubai debt problems and the strong Canadian dollar....
Canada crawled out of recession in the third quarter after three quarters of contraction. But the 0.4 per cent annualized growth rate fell short of market expectations for 0.7 per cent growth and the Bank of Canada's earlier 2 per cent forecast.
The strong Canadian dollar, which rose again Tuesday against the greenback, does not warrant special measures like those taken by the Japanese central bank Monday, Flaherty said.
"There are options that we have, if we chose to use them, but there is no indication that we would do anything like that now," he said.
"The pressure is downward on the U.S. dollar and that has an effect on all the market currencies."...
The Canadian dollar has also appreciated sharply against the U.S. currency for much of this year, prompting Bank of Canada governor Mark Carney to warn last month that the currency's rise could delay recovery and possibly warrant central bank reaction.
The loonie lost ground following news of Dubai World's debt problems but resumed its upward climb this week. On Tuesday it closed at 95.57 (U.S.) cents, up from Monday's finish at 94.73 cents.
Canadian markets also began to breathe easier along with global markets as fears of Dubai World defaults waned. Flaherty said some Canadian banks had modest exposure to the emirate.