/biz/ - Business & Finance

Another thing to consider is overnight interest rates. Canada is currently at .75% after declining to raise in Q4 2017. I believe America is at 1.5%. Canada will generally try to keep our overnight rate in-line with America’s. If interest rates diverge then the Canadian dollar drop if they converge the Canadian dollar strengthens. If the bank of Canada’s raises the rate throughout 2018 housing prices will fall as access to credit falls and the Canadian dollar will strengthen reducing foreign investment further decreasing the housing market. It’s a interesting balance, BCs GDP for example is 18% housing market and the BOC will only raise the rate if the economy is strong.