Markets Stabilize — Canadian Dollar Goes Up

The Canadian dollar halted its decline to the lowest level against its U.S. counterpart this month and rose today as the turmoil on the equities markets, caused by the European sovereign-debt crisis, receded and the demand for the currencies tied to growth returned.
Despite the previous forecasts that the Bank of Canada will raise the interest rates to fight with the accelerating inflation, the traders are cutting bets that the rates will be increased. The reason for such turn of events is the European troubles discouraging the policy makers to perform rate hikes. However, the reports suggesting about higher retail sales and the accelerating inflation may cause the policy makers to change their mind yet again.
The retail sales increased for a fourth consecutive month in March, rising 2.1% to C$37 billion, adding to signs of the economic recovery in Canada. The rate of the annual inflation increased to 1.8 percent from 1.4 percent the last month.
USD/CAD dropped to 1.0618 as of 18:23 GMT after opening at 1.0699. CAD/JPY rose to about 84.54 from the opening rate of 83.78.

If you have any questions, comments or opinions regarding the Canadian Dollar,
feel free to post them using the commentary form below.

Leave a Reply

Your email address will not be published. Required fields are marked *

five + 1 =