The Canadian dollar resumed today the rise against its U.S. counterpart, after it dropped yesterday, on speculation that the central bank will increase the interest rates, signaling about the waning need for stimulus measures.
The Bank of Canada reported that the economic growth will expand by 5.8 percent through the first quarter, while inflation will rise to 2 percent in the third quarter of 2010 and remain near that level until the end of 2012. Mark Carney, the Governor of the Bank of Canada, explained that he dropped the conditional pledge to hold the rates at the record low level till July as it is no longer necessary.
The evidences that the central bank will raise the interest rates are becoming stronger. The analysts say that the Canadian currency has hard time to remain at parity at present, but in the long run it should outperform the greenback.
USD/CAD traded today at about 0.9989 as of 18:24 GMT after opening at 0.9995 and reaching its daily low of 0.9958. EUR/CAD traded near 1.3301 after opening at 1.3385.
If you have any questions, comments or opinions regarding the Canadian Dollar,
feel free to post them using the commentary form below.
