The Canadian dollar touched the lowest level in more than a week after the Bank of Canada said its next move on interest rates could be up or down as a forecast pickup in business investment has been slow to materialize.
Bank of Canada Governor Stephen Poloz will probably keep the benchmark interest rate unchanged today as he weighs the risks posed by inflation that’s been below target for more than a year against concerns that lower borrowing costs could lead consumers to add to record debts.
Traders are betting the Canadian dollar fell too far, too fast in its worst start to a year in more than four decades, as rising commodities prices and a forecast budget surplus damp speculation for interest-rate cuts.
The announcement by John Murray that he’ll retire from the Bank of Canada next year leaves Governor Stephen Poloz facing the prospect of having two new faces on the bank’s six-member rate-setting panel less than one year into his tenure.
Canada’s dollar strengthened against all 16 of its most-traded counterparts as global stocks rallied and Potash Corp. of Saskatchewan Inc. received a $39 billion purchase offer, boosting demand for growth assets.
Canada’s jobless rate unexpectedly fell to the lowest in almost five years in September as young people dropped out of the labor market, helping pull the participation rate to the lowest in more than a decade.
The Canadian dollar reached a four- year low for a second day on speculation the nation’s central bank may signal at a meeting next week the need for lower interest rates amid faltering economic growth.
Canada’s dollar fell for the first time in six days as central-bank Governor Stephen Poloz warned of deflation after a rise in U.S. retail sales lifted bets the Federal Reserve will start trimming its bond-buying program.
Canada’s dollar fell the most in a month versus the greenback and traded near a seven-month low against the euro before a meeting tomorrow at which economists predict the Bank of Canada will leave interest rates unchanged.