The bank of Canada Tiff Macklem said on Thursday that it’s certain that the Canadian government will exit the pandemic with higher public debt levels. 

Last week, the Canadian Dollar gained 1.45 percent against the greenback, advancing for the second consecutive week.

So far, 180,179 coronavirus cases have been reported in Canada, while the death toll is at 9,608. Given the recent rise in the number of COVID-19 cases in certain zones, new restrictions have been imposed by the Ontario government, like limiting indoor dining at restaurants and bars, as well as closing movie theatres, gyms, and casinos.

On Tuesday, Canada’s national statistical agency reported that imports amounted to 47.38 million in August, after being at 47.93 billion in the previous month. Exports amounted to 44.93 million in the same month, after being at 45.4 billion in July. International Merchandise Trade, which registers the difference in the value of imports and exports of Canadian goods (excluding services), stood at -2.45 billion, way below the analysts’ expectations, who foresaw it to be at -0.29 billion and after being -2.53 billion in the previous month.

On Wednesday, the Richard Ivey School of Business published the Ivey Purchasing Managers Index for September, which signaled a slower expansion of the business sector in four months, at 61.1 after being at 64.6 in the previous month. The seasonally adjusted PMI was at 54.3, signaling a slower expansion, as the previous month’s PMI stood at 67.8.

On Thursday, the Canadian Mortgage and Housing Corporation reported that new residential construction projects dropped to 209.000 (year-to-year), fewer than what the surveyed analysts expected, as they foresaw it to be at 240.000, and after being at 261.500 in august.

The bank of Canada Tiff Macklem said on Thursday that it’s certain that the Canadian government will exit the pandemic with higher public debt levels. He highlighted that without the fiscal and monetary policy actions that have been taken since the beginning of the pandemic the economic devastation would have been higher.

“As much as a bold policy response was needed, it will inevitably make the economy and financial system more vulnerable to economic shocks down the road,” he said during a video conference with a financial risk management group, “Without the fiscal and monetary policy actions, the economic devastation of the pandemic could have been much, much worse,” he added.

Macklem also commented that full economic recovery will take a long time while asking the public to practice physical distancing in order the avoid the uncontrollable spread of the virus and a second lockdown.

On Friday, Canada’s national statistical agency reported that the Unemployment Rate fell to 9 percent in September, lower from what the analysts expected as they expected it to fall to 9.7  percent, and below the previous month’s figure which stood at 10.2 percent in the previous month. The Participation Rate stood at 65 percent, after being at 64.6 percent in the previous month and over the analysts’ expectations, who foresaw it to be at 64.8 percent.

Average hourly wages went up by 5.43 percent, after being at 6 percent in the previous month, while Net Change in Employment was at 378.200, higher than the previous month’s figure, which stood at 245.800 and over the analysts’ expectations, who foresaw it to be at 156.600.

Full-time employment went up by 97,000 last month after a decrease of 20,100 in September.

So far this week, the Australian dollar has advanced against the US dollar, gaining 0.08 percent and continuing its three-week gaining streak, raising concerns about the appreciation of the US dollar. It seems that the Australian dollar has been benefitting from the greenback’s recent weakness, which has lost 0.23 percent against a bundle of its main competitors.

The Reserve Bank of Australia recently released its notes, in which the Reserve Bank states that members are not willing to set negative interest rates yet and that any further action would involve the expansion of the bank’s bond purchasing program. The notes also state that monetary and fiscal stimulus will be needed for a long term, and that cash rates will not be raised for the next three years.

A special focus was placed on the current low interest rate levels which, according to the board, is affecting exchange rates and asset prices. This could push the bank to further lower its interest rate levels, which currently stand at 0.1 percent. According to Bank Governor Phillip Lowe, if other central banks decide to bring their cash rates into negative territory, the RBA would be forced to follow them.

The coronavirus crisis seems under control in the Australian territory. Nevertheless, the State of Victoria recently decided to restrict its border given the surge of cases in southern Australia. So far, 27,785 cases have been reported on the island, as well as a death toll of 907.

On Wednesday, the Australian Bureau of Statistics reported that the Wage Price Index stood at 1.4 percent in the third quarter (year-on-year), after being at 1.8 percent in the previous month. The figure was lower than expected, as analysts predicted it to be at 1.5 percent. In monthly terms, it stood at 0.1 percent, also lower than analysts’ expectations of 0.2 percent and lower than the previous month’s figure, which stood at 0.2 percent.

Unemployment figures for October were lower than expected. The unemployment rate in October was at 7 percent, an increase from the previous month’s 6.9 percent but lower than analysts’ expectations of 7.2 percent. Employment change was at 178,800 after a change of 29,500 in the previous month, also beating analysts’ expectations.

Full-time employment went up by 97,000 last month after a decrease of 20,100 in September. Similarly, part-time employment increased by 81,800, after going down by 9,400 in September. The participation rate stood at 65.8 percent, increasing from the previous month’s 64.8 percent, and was higher than analysts’ expectations of 64.7 percent.

Tensions with China, Australia’s main trade partner, have also been on the rise. Regarding this, Reserve Bank of Australia’s Governor Phillip Lowe said that there is a need to keep a strong trading relationship with the Asian country. The government has been also making efforts to get closer to Beijing, though not enough, according to the Chinese. China has stated that Australian representatives should “take concrete actions to correct their mistakes”.