The Canadian dollar dropped yesterday, falling below 1.10 against the US dollar for the first time in more than four years, and retained its weakness today. Traders were largely pessimistic about the currency ahead of the central bank’s meeting and fundamentals did not help to alleviate this sentiment.
The Bank of Canada is going to meet today to make a decision about monetary policy. No changes to policy are expected, but market participants are worried that the accompanying statement may be dovish and hint at lower interest rates. It looks like all chances for monetary tightening have gone after Stephen Poloz replaced Mark Carney on the post of BoC Governor.
Some of yesterday’s data was really disappointing and added to bearishness of the loonie. Wholesale sales showed no change in November of last year, while analysts have expected an increase by 0.3 percent. Sales grew 1.2 percent in October.
USD/CAD was up from 1.0966 to 1.0974 as of 00:33 GMT today after touching 1.1017 yesterday — the strongest rate since September 2009. EUR/CAD advanced from 1.4869 to 1.4882 and CAD/JPY was down from 95.07 to 94.99.
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