Canadian Dollar Pares Losses

The Canadian dollar rose today after it fell yesterday as Canada’s central bank kept the interest rates unchanged and the commodities, including crude oil, dropped, decreasing appeal of the currencies linked to the economic growth.

January delivery for crude oil slipped 1.3 percent to $88.18 after it rose above the resistance level of $90 per barrel in New York for the first time in more than two years. The 
Reuters-Jefferies CRB Index of raw materials dropped 0.5 percent, following the advance by 1.1 percent to 320.74, the highest level in 26 months. The Standard & Poor’s/TSX Composite Index in Toronto gained 0.7 percent before ending the day down 0.2 percent.

The Bank of Canada kept its interest rates at 1 percent and said in its statement that “any further reduction in monetary policy stimulus would need to be carefully considered” as the declining exports and the European sovereign-debt crisis harm the economic recovery. The Bank also stated that “a combination of disappointing productivity performance and persistent strength in the Canadian dollar could dampen the expected recovery of net exports”.

USD/CAD traded near 1.0109 today as of 02:15 GMT, following the advance from 1.0054 to 1.0122 yesterday. The currency pair reached on the yesterday’s trading session the intraday low of 1.0010. EUR/CAD traded at about 1.3404 after it went up on the previous from 1.3378 to 1.3424.

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