The Canadian dollar extended its advance versus the US dollar Tuesday, reaching its firmest level since before the Bank of Canada surprised markets in January with an interest rate cut, as additional rate reduction bets diminish.
BOC Governor Stephen Poloz told the House of Commons finance committee the negative impacts of the sharp slump in crude prices were affecting the country more quickly than projected, but the shock did not appear to be larger than anticipated.
Markets are scaling back from expectations of further rate cuts. The comment about the Canadian recovery “really did give some lift to the Canadian dollar,” said Bipan Rai, Director of Foreign Exchange Strategy at CIBC World Markets.
The loonie closed at 83.13 US cents, from Monday’s 82.64 US cents.
Markets will look forward to the Canadian February GDP due Friday.
The material has been provided by InstaForex Company – www.instaforex.com