Loonie Gets Boost from Carney’s Comments
The Canadian dollar gained today, rising for the fifth straight trading session against the US dollar, as Mark Carney, Bank of Canada’s Governor, suggested that an increase of interest rates may be needed in the near future. The Canadian economy differs from the struggling economies of some other developed nations, which strives to lower their borrowing costs.
Carney said today in an interview:
We had been growing above trend, and the extent to which we continue to grow above trend, we may withdraw some of that monetary policy stimulus. We have a financial system that’s firing on all cylinders and so we will have to adjust, we will adjust if it’s appropriate. That said, the world’s a very dangerous place at the moment.
The world, indeed, does not make it easy for Canada’s economy to grow. Demand for exports is weakening, leading to the increase of the trade deficit from C$954 million in May to C$1.8 billion in June. Carney’s optimism will be further tested by tomorrow’s employment data. Economists are fairly positive, predicting an increase of employment by 9,600 jobs.
USD/CAD fell from 0.9944 to 0.9915, the lowest settlement since May 4, and EUR/CAD declined from 1.2298 to 1.2193 as of 20:11 GMT today, while its daily minimum of 1.2169 was the historic low. CAD/JPY advanced from 78.83 to 79.21, while the daily maximum was at 79.45.
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Earlier News About the Canadian Dollar:
- Loonie Supported by Domestic Fundamentals & Traders' Optimism (2012-08-08)
- Loonie Profits from Optimism Caused by US Payrolls (2012-08-03)
- CAD at Record High vs. EUR (2012-08-02)
- EUR/CAD Rebound from Record Low as Canada's Growth Slows (2012-07-31)
- CAD Gains vs. USD & JPY, Falls vs. EUR (2012-07-26)