Bad news for Canadian webmasters.

[Paraskass]

This article confirms what I read about yesterday:

TD sees loonie at 83 cents (U.S.)

The Bank of Canada will raise its benchmark lending rate to 4 per cent next year and the Canadian dollar will climb to 83 cents (U.S.) by 2006, according to a new forecast by Toronto-Dominion Bank.

The bank sees the Canadian economy expanding 3.5 per cent in 2005, up from 2.8 per cent this year, while it clocks in at 3.2 per cent in 2006.

?Canada and the United States are headed into their fourth successive year of growth after the 2001 slump,? said Don Drummond, T-D Bank's chief economist. Since 2001 the Canadian economy has averaged annual growth of 2.9 per cent while the U.S. has grown on average by 3.4 per cent.

T-D Bank sees the U.S. economy growing by 4.3 per cent this year, slowing to 3.5 per cent next year and 3.3 per cent in 2006.

The U.S. dollar will remain under pressure because of the country's massive current account deficit, which will lift the Canadian dollar to 83 cents in 2006, Mr. Drummond said.

The U.S. current account deficit ? the broadest measure of the country's trade with the rest of the world ? rose to a record $166.2-billion (U.S.) in the second quarter.

Earlier this week, National Bank Financial's chief economist Clément Gignac said the Canadian currency will rise to 85 cents next year as the U.S. dollar weakens.

The Bank of Canada will continue to boost its overnight lending rate, which will reach 2.75 per cent by December from its current setting of 2.25 per cent, with further increases to 4 per cent by the end of next summer, T-D Bank said.

At that point ?monetary policy will still be in stimulative territory, but rates will be close to neutral and at more comfortable levels for the central banks to take a breather, gauge how much economic slack is left, and assess the risks of price pressures,? Mr. Drummond said.

By the end of 2006, the Bank of Canada's overnight rate will rise to 4.75 per cent while the U.S. federal funds rate will rise to 4.50 per cent, he said. This level is considered neutral ? neither providing the economy with too much stimulus, nor holding it back.

The bank sees inflation averaging 1.9 per cent next year and slowing to 1.8 per cent in 2006.

The rate increases will result in higher bond yields, with short-term yields rising faster than those at the long end of the curve, T-D Bank said. Because of the record U.S. deficit and supply pressures in the Treasury market, U.S. bond yields will rise, allowing Canadian bonds to outperform their U.S. counterparts, the bank said.

http://www.globeinvestor.com/servlet...tdforecast0916

[Rich]

Yes the high dollar is bad when exchanging money, but a solid economy means more to me than a couple % on my exchange. If you can't make money on an economy like ours, you have a horrible advisor.

[VirtuMike]

For them to forecast the US economy only weeks before the biggest election in the history of the world and act on it would possibly be the single biggest blunder in the bank's history. I always had some respect for TD - but now I don't think I would even consider putting money after seeing their decision process.

[dready]

Unfortunately I think the US dollar is just going to continue to slide. I bet we will once again see the Canadian Dollar above the $1 level.

[chowda]

maybe sponsors should be paying in ounces of gold instead?

[dready]

Originally posted by chowda
maybe sponsors should be paying in ounces of gold instead?

Is there a eGold.com or something like paypal?

[NoCarrier]

FOR THE LOVE OF GOD. DON'T VOTE FOR BUSH AND MAYBE THE U.S. ECONOMY WILL BE A PRIORITY AGAIN.