The Canadian dollar rallied Wednesday following the Bank of Canada played down the likelihood of further interest rate cut, with the currency reaching its firmest level versus the US dollar since the central bank’s rate reduction in January.
BOC Governor Stephen Poloz renewed his stance the impact of oil-price decline on the Canadian economy would have been worst in the first part of 2015, and the bank’s 25-basis-point January reduction, as well as stronger US demand, would support non-energy exports and strengthen labor markets.
Perhaps the most optimistic remark was certain economic weaknesses we noticed was front-loaded and the economy would be on pretty “good growth trajectory for the remainder of the year,” said Lennon Sweeting, Currency Strategist at USForex.
The loonie ended at C$1.2300 per greenback or 81.30 US cents, from Tuesday’s C$1.2490 or 80.06 US cents.
Wednesday’s move was also the currency largest one-day advance since mid-March.
The material has been provided by InstaForex Company – www.instaforex.com