Gina Burgio

Bank of Canada is expected to lower interest rates this Tuesday... many economists are forecasting a half-point chop to their bank rate to 1.75 per cent, the lowest since 1960.

Interbank funding spreads have narrowed by more than half since mid-October. This is making it possible for banks to pass on the central bank rate cut to customers in the form of lower prime rates.

Prime rates are the rates for loans to banks' best corporate borrowers and are the base for lending on everything from mortgages, lines of credit, consumer loans and car loans.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Back on October 16, 2008, I posted my article "Canadian Dollar vs US Dollar and The Price of Oil" (see below) that was well received on ActiveRain. I found a chart recently that set out the estimated Oil Reserves by Country, so I thought that I would re-post my article with a link to this chart. Click Here to see the Chart.

Canadian Dollar vs US Dollar and The Price of Oil

Many people were wondering last week why the Canadian Dollar started to lose value against the US Dollar, when it appears that the USA was in greater crisis mode in comparison to Canada.

Well here is why....

Canada is one of the world's largest producers of oil and holds oil reserves second only to Saudi Arabia, which makes Canada very reliant on its most prized commodity. It is also the largest supplier to the world's biggest oil consumer - the United States. Therfore, rising oil prices tend to be good for Canada/bad for the U.S., while falling oil prices tend to be bad for Canada/good for the U.S.

As you can see from the chart above, price movements USD/CAD and Oil are inversely correlated from each other - meaning as oil trends higher, USD/CAD tends to trend lower and vice versa.

Since January 1988, USD/CAD and Oil have had about a 68% inverse correlation to each other. This is a pretty strong correlation.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Bank of Canada governor Mark Carney said in a speech recently that the Canadian economy has deteriorated more quickly than he had anticipated, hinting strongly he will cut interest rates at the next meeting on December 9.

This is also the first time that the Bank of Canada has conceded that the Canadian economy could be headed for a recession. "Starting from flat growth in the first quarter of 2009 and the second quarter of 2009 ... recession is a possibility for Canada," commented Carney.

The technical definition of a recession is two or more consecutive quarters of negative economic growth. The Canadian economy contracted in the third quarter ended and is expected to contract again in the current quarter ended Dec. 31.

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Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.

New numbers released by the Japanese government indicate the country has entered a recession.

Japan's economy, the second largest in the world, contracted by 0.1 percent in the third quarter, after shrinking 0.9 percent in the second quarter of the year.

Japan has estimated that its Gross domestic product (GDP) contracted at an annualised rate of 0.4 percent.

The Bank of Japan has also cut its key interest rate for the first time in more than seven years, lowering it to 0.3 per cent, joining central banks around the world in trimming borrowing costs.

Japan joins Germany and Italy on the list of Group of Eight major economies that are officially in recession.

The technical definition of a recession is two or more consecutive quarters of negative economic growth.

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Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.

I am pleased to announce that the grand opening of our Ancaster office is scheduled for December 1, 2008.

The new office will be located at 911 Golf Links Road in the Meadowlands area of Ancaster, Ontario.

We are excited about the opening of this new location and are looking forward to serving members of the community and the surrounding areas from this location. I would like to also thank our clients for their ongoing support.

Call today at 1-877-345-6265 to book an appointment to discuss your mortgage needs!

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Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.