The Canadian dollar had the biggest two-day slump in four months after the central bank dropped language about the need for future interest-rate rises that had been in place for more than a year, as risks of a worsening economy increased.
Group of 20 finance chiefs sharpened their stance against governments trying to influence exchange rates as they sought to tame speculation of a global currency war without singling out Japan for criticism.
The dollar strengthened and the yen fell before testimony from Federal Reserve Chairman Ben S. Bernanke that investors are looking to for signs on the strength of the U.S. economy and the central bank’s stimulus plans.
Canada’s ruling Conservative Party faces a possible upset in Calgary, the political home of Prime Minister Stephen Harper, in one of three special elections being held today to fill vacancies in the House of Commons.
Developing nations from Brazil to India are preserving a record $2.9 trillion of foreign reserves and opting instead to raise interest rates and restrict imports to stem the worst rout in their currencies in five years.
The Federal Reserve’s mixed messages on monetary policy are stoking volatility in the $4 trillion-a- day currency market, raising the odds that companies will have a harder time setting up exchange-rate hedges designed to protect overseas earnings.
London Stock Exchange Group Plc sank the most in three years after saying European Union regulations will cut income at its Italian central counterparty and may require LCH.Clearnet Group Ltd. to boost capital.