London, United Kingdom (PressExposure) April 23, 2010 -- "Zen International" analysts believe that the Bank of Canada is likely to raise interest rates before the US Federal Reserve as the country's economy rebounds from a global recession faster than any other G7 nation.
The central bank recently stated that the time for keeping its benchmark rate at a record low 0.25 percent was passing. The Canadian dollar, which "Zen International" has encouraged clients to hold instead of other currencies like sterling, the euro or the US dollar, has performed well as investors speculate the Bank of Canada will raise lending rates at the next meeting on June 1.
Canada's economy has been underpinned by a banking system rated as the world's soundest by the World Economic Forum for two consecutive years, while housing prices have returned to near-record levels. "Zen International" also cites increasing demand and prices for many of the commodities the country exports such as oil and copper. The central bank's governor, Mark Carney has raised his growth forecast for 2010 to 3.7 percent from 2.9 percent and said the economy will expand 3.1 percent in 2011.
"Zen International" dismissed concerns that the country's close trade ties to the United States could have an adverse effect on its exports of oil arguing that demand from the emerging economies of China and India would continue to grow in the near term but the firm did envision moderate risks from a strengthening Canadian dollar to US dollar exchange rate.