The Canadian dollar was soft ahead of the US Federal Reserve policy meeting. Traders speculated that the Fed may give hints about details of quantitative easing tampering.
Market participants are afraid of QE reduction as it will likely hurt prospects for export-oriented economies. The Canadian dollar, being a commodity-related currency, is vulnerable to such fears. Yesterday’s drop of oil prices by as much as 1.4 percent did not help the loonie either.
Analysts estimated that Canada’s economic growth accelerated to 0.2 percent in May from 0.1 percent in April. The official report will be released today. Hopes for faster growth did not help the currency much.
USD/CAD advanced from 1.0263 to 1.0302 yesterday and traded at about 1.0297 as of 4:31 GMT today. EUR/CAD traded at 1.3651 after rallying from 1.6310 to 1.3663. CAD/JPY went down from 95.58 to 95.08 before trading at 95.17.
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