Trade data in July out of both the US and Canada showed greater imports and exports, indicating greater economic activity than forecast. Also, weekly unemployment claims in the US came in below consensus. The statistics were in line with the emerging picture of a strong initial phase of economic recovery and did not move markets much. Housing prices in Canada continue to climb with Toronto showing a month over month increase of 20% to record a new high. It is clear that massive injections of liquidity are inflating asset prices (housing, stocks, bonds, etc.) and that the initial phase of the recovery is going well. The Canadian dollar is down 0.4% this morning as oil continues its decline from yesterday and is down over 2%. The USD CAD exchange rate is near our Short Term Consensus Canadian Dollar Forecast which currently sits at 1.315.
