• The Bank of Canada held rates this month sparking a further rally in the Canadian dollar.
  • The near term chart is bullish.
  • The longer term charts say otherwise.

And that’s what has the BoC worried and why it didn’t raise interest rates, despite strong year-over-year economic data. But, much of that good data, per the BoC’s statement is a result of housing bubbles in Toronto and Vancouver.

So, if those bubbles are bursting then the BoC has no room to raise rates and exacerbate an already bad situation.

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