Sunday, 28 August 2011

BOC Rate Statement Invigorates Loonie

The Canadian dollar jumped these days after Canada’s central bank held interest rates and signaled that it will resume its rates increases soon as economy improves.

The Bank of Canada maintained its key Overnight Rate at one percent and wrote in the statement:

To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be withdrawn. Such reduction would need to be carefully considered.

Tomorrow the bank can release the monetary Policy report, followed by the press conference.

The advance of crude oil and also the gains of stocks busted the Canadian currency further. August futures for delivery of crude oil rose a pair of.2 percent to $98.07 per barrel on NYMEX. The MSCI World Index of stocks of developed economies climbed one.3 percent.

USD/CAD slumped from 0.9592 to 0.9507 as of 17:05 GMT today after reaching 0.9480, the lowest level since May 3. EUR/CAD dropped from 1.3540 to 1.3456 after posting the intraday low of 1.3438, the lowest price since March 11. CAD/JPY jumped from 82.32 to 82.96.

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