Judgments as to what is, or is not, justified are very difficult to make, but there are times when the good economic news gets lost in the face of a persistent currency decline. On those occasions, Canadian authorities need to remind investors of the positive trends in our economy.
And to reinforce the message, the Bank may intervene, on behalf of the Minister of Finance, to support the currency by buying Canadian dollars in the foreign exchange market. But we do know that this kind of intervention will be effective only if a good number of investors share our belief that the currency movement has been overdone.