The Canadian dollar continued to fall against its US counterpart today as macroeconomic data suggested that the Federal Reserve will be able to tamper its stimulus program. The currency was a little higher versus the euro and flat against the Japanese yen.
Virtually all US economic reports were good today. Such positive data can encourage the Fed to start trimming its asset purchases soon. This prospect is harmful for assets associated with risk and the loonie suffered along with other higher-yielding currencies.
Fed members tried to mitigate the impact of the previous comments. Richard Fisher, the President of the Federal Reserve Bank of Dallas, said:
What weâre talking about here is dialing back. The word “exit” is not appropriate here.
Yet markets remain fearful of potential stimulus reduction.
USD/CAD rose from 1.0497 to 1.0512 as of 20:55 GMT today. EUR/CAD fell from 1.3772 to 1.3753 and its daily low was at 1.3716. CAD/JPY traded sideways at 93.01.
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