Bank of Canada Drops Rates By .50%

April 22, 2007 - Bank of Canada drops the overnight rate by .50%.

None of the lenders have reacted by lowering their mortgage rates yet but as soon as I see somes changes by the mortgage lenders I'll post the mortgage rate updates.

Here is the link to the Bank of Canada press release regarding the rate drop.

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Interest Rates Heading Lower? TD Securities Thinks So.

April 10 (Bloomberg) -- Canada's February trade surplus widened to the largest in nine months, led by increased exports of passenger cars and energy. The surplus widened to C$4.94 billion from a revised C$2.78 billion in January, Statistics Canada said today in Ottawa. Exports rose 3.8 percent, the fastest in 11 months, as energy sales abroad rose to a record.

Canada, the world's eighth-biggest economy, is benefiting from high demand for commodities such as oil and metals, helping the country ride out a slump in manufacturing. Still, the outlook for exports is likely to worsen in future months as the U.S. economic slowdown crimps demand for Canadian products, said Jacqui Douglas, an economist at TD Securities in Toronto.

``I don't think the Bank of Canada is expecting this to continue,'' Douglas said of the widening surplus. ``The risk is that exports turn down sharply over the next few months.'' The central bank cut interest rates by half a point for the first time since 2001 on March 4, citing ``intensifying'' signs of a decline in exports on slower demand from the U.S. and the high Canadian currency.

TD Securities, a division of Toronto-Dominion Bank, expects the central bank to lower interest rates 150 basis points to 2 percent by July, starting with a 50 basis point reduction at the next announcement on April 22.