ajtj99's Market Pulse

[ajtj99]

Until the other economies begin to show sings of weakness, there is no reason for them to reverse their current interest rate courses.

Good examples would be Canada and Australia. Canada's economy is weakening due to its strong ties to the US and its problems. Australia is largely a commodity economy, and it has raised their central bank rate to 7.5% this month.

Right now the ECB has pockets of weakness, primarily due to the housing bubbles in Spain, Greece, and a few other places. However, as a whole they have not seen the kind of weakness evident here in North America. Until they do, I think their actions need to be prudent.

Remember, England is not part of the Euro zone, so their problems are their own, and they are dropping rates in accordance with that.