October 8, 2008

World currency market activity benefits Canada and its construction industry, economist says

Denise Holtby

Editor, Digital Media

While the lustre of the U.S. greenback may be a little tarnished, says CanaData chief economist Alex Carrick, it’s still proving more attractive than many other world currencies.

“Because central banks in Europe are perceived as responding too slowly to failing and at-risk financial institutions at home, there is a stampede underway...to place funds in ‘safe’ securities such as U.S. treasury bills and bonds,” says Carrick.

“The U.S. dollar remains the number one haven for investors in difficult times,” Carrick explains. “And, as the U.S. dollar rises, the prices of commodities will fall.”

“In turn, lower commodity prices will subdue some of the volatility in construction costs throughout the remainder of 2008 and throughout most of 2009,” says Carrick. “Of course, this will have positive implications for the Canadian construction industry."

For a detailed analysis of world currencies in relation to the U.S. and more insights into the potential impact on Canada’s manufacturing and construction industries, check out Alex Carrick’s blog on www.reedconstructiondata.com.

Print | Email | Comment