This week was bad for the Canadian dollar as the central bank hurt the currency after it dropped its hawkish stance and refrained from mentioning plans for an interest rate hike.
It looks like the Bank of Canada is less certain about its ability to raise interest rates in the foreseeable future. This greatly hurt the Canadian currency, which was already weak due to risk aversion caused by monetary tightening in China. Even poor US non-farm payrolls, which allowed most major currencies to rally at the expense of the US dollar, did not allow the loonie to rise very much.
Elsewhere, signs that the Reserve Bank of New Zealand will also not be able to perform a rate hike soon damaged the New Zealand dollar. Governor Graeme Wheeler was more hawkish than his colleague from the BoC, but the New Zealand currency was still softer than its Canadian counterpart.
USD/CAD jumped from 1.0289 to 1.0453 (the highest weekly close since August) and EUR/CAD advanced from 1.4080 to 1.4433 (the strongest settlement since January 2010). CAD/JPY dropped from 95.08 to 93.11 this week. NZD/CAD slid from 0.8733 to 0.8659.
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