The Canadian dollar rallied against its US peer yesterday on speculations that the Federal Reserve is going to tamper stimulus, but retreated a little today. The currency erased losses versus the Japanese yen, while staying little changed against the euro.
This week, the loonie, as well as other currencies, depends for the most part on guesses about what Ben Bernanke will say, not domestic fundamentals. The currency profited from talks about scaling down of quantitative easing, but started today’s session with a loss.
As for news from Canada, manufacturing sales increased 0.7 percent in May following a drop in April. This report was good, but hardly affected the currency in any noticeable manner though. The really important domestic event for the Canadian dollar will be today’s Bank of Canada policy meeting, even though it is unlikely that Stephen Poloz will make any significant shift to monetary policy during his first meeting in a role of the central bank’s head.
USD/CAD traded at 1.0386 as of 2:28 GMT today after dropping from 1.0424 to 1.0385 (0.6 percent) yesterday. EUR/CAD was flat at about 1.3646. CAD/JPY fell from 95.74 to 95.51 on the previous trading session, but bounced to 95.72 on the current session.
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