The Canadian dollar strengthened today against the US dollar and the Japanese yen, reversing its yesterday’s decline. The Canadian currency remained steady versus the euro, keeping its yesterday’s losses, but not falling further.
The major event, that returned risk appetite to the Forex market, was the minutes of the last policy meeting of the Federal Reserve. The minutes showed that the Fed still considers stimulating the economy of the United States. The loonie was also boosted by Bank of Canada’s Governor Mark Carney, who reiterated that the BoC may raise interest rates in the future. Carney said in a speech:
To the extent that the economic expansion in Canada continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate.
Not everything was positive for the Canadian currency. Canada’s retail sales fell 0.4 percent in June, erasing the May’s increase by 0.2 percent. Economists were frustrated as they were expecting an advance by 0.2 percent.
USD/CAD was down from 0.9906 to 0.9899 as of 2:35 GMT today. CAD/JPY rose from 79.24 to 79.30. EUR/CAD was flat at 1.2410.
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