Wednesday, 7 September 2011

CAD Near Parity with USD

The Canadian dollar traded within a cent of parity with the U.S. currency as declining stocks and signs of global economic slowdown spurred speculation the central bank will reduce interest rates.

The Bank of Canada will announce its decision on future borrowing costs. Views of investors are divided almost equally between those who believe the bank will keep the key overnight interest rate unchanged at 1 percent and those who think that current economic conditions will force banks to reduce their rate target interest.

The Standard & Poor's 500 fell to 2.2 percent. The market's pessimism was tempered by the news of the U.S., Canada's largest trading partner. The services Purchasing Managers' Index of the Institute for Supply Management advanced 52.7 to 53. 3 in August, compared with the average forecast of 51.2.

USD / CAD traded at 0.9910 around 15:31 GMT from today after jumping from 0.9904 to 0.9963. EUR / CAD rose from 1.3960 up to 1.4100 before easing to 1.3871. EUR / JPY rose from 77.50 to 78.05.

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