Canadian Dollar Falls on Poloz’s Growth Forecast
The Canadian dollar fell further below 90 US cents, as the forex market continued to react to Bank of Canada Governor Stephen Poloz’s gloomy growth forecast.
The loonie fell sharply Tuesday after Poloz said slow economic growth is likely the new norm for Canada. The Canadian economy surprised the markets last quarter by expanding at an annualized rate of 2.9 percent. However, this likely won’t be enough to spearhead a faster rebound for the export-driven nation of 36 million. According to Poloz, the central bank may have to keep interest rates low to ensure the economy continues to grow.
After his speech, Poloz said there wasn’t much evidence to suggest Canada’s export market has benefited from the loonie’s recent skid.
“To date, I’ve not seen anything that suggests we’ve actually had a reaction to that,” Poloz said in a news conference. “It’s not expected to be the big thing that causes our trade performance to change. I think the big thing is the US recovery.”
The Canadian dollar has been trading below parity with the greenback since February 2013. Declining commodity prices, emerging market volatility and domestic uncertainty have all driven a wedge in Canada’s growth prospects, which have in turn weighed on the loonie. While firmer GDP results last quarter silenced speculation about lower interest rates, Poloz said yesterday he wouldn’t rule out another rate cut to stimulate growth. Canada’s benchmark interest rate has been left at 1 percent since September 2010.
The USDCAD currency pair soared to 1.1144 in the afternoon trade, advancing more than 0.7 percent. The pair, which was supported all day, spiked after the Federal Reserve announced it will taper bond purchases by another $10 billion. Fed Chair Janet Yellen said the central bank’s quantitative easing program could be wrapped up this fall.
- Stocks Notch Up Losses for a Third Consecutive Session 1 view
- Veeco Launches EPIK700 MOCVD System to Accelerate Adoption of Solid-State Lighting 1 view
- Loonie Poised to Gain Ground on Strong Employment Report 1 view
- Mellanox Provides Leading Application Performance with FDR InfiniBand for HPC-Purpose Built Dell PowerEdge C4130 1 view
- Harris Warsaw Joins Pitney Bowes as Senior Vice President of Sales, Global SMB Solutions 1 view
- US Housing Data Steps into the Spotlight 1 view
- Steady Reading On French Inflation 1 view
- AUD/USD climbs ahead of the Reserve Bank of Australia 1 view
- Sam’s Club to Offer LifeLock(R) Identity Theft Protection 1 view
- FOREX Watch: US dollar breaks sticking point 1 view
|Forex Broker Spreads »|
|Most Popular Articles »|
- Kinder Morgan: Filing Your Taxes After the KMP-KMI Merger 1 view
- AllianzGI Diversified Income & Convertible Fund Closes its Initial Public Offering 1 view
- Northern Trust Announces Manila, the Philippines Office Opening 1 view
- The Importance of Cash Savings 1 view
- Christopher Brody to Step down From Intuit Board of Directors; Richard Dalzell Nominated 1 view
- US Industrial Production Growth Stalls 1 view
- LNB Bancorp, Inc. Shareholders Vote to Approve Merger with Northwest Bancshares Inc. 1 view
- Sterling Slides as Minutes Reveal Hawkish Central Bank that is Not Yet Ready to Act 1 view
- US Dollar Steadies at 6-Year Highs 1 view
- Philips Selects Revolutionary Voice Recognition Software from VoiceItt as Winner of Annual Innovation Fellows Competition 1 view