Canadian Dollar Drops After BOC Poloz Comments
October 24 2016 - 10:16PM
RTTF2
The Canadian dollar weakened against other major currencies in
the Asian session on Tuesday after Bank of Canada's Governor
Stephen Poloz hinted at the possibility of interest rate cuts.
At a speech to the House of Commons finance committee in Ottawa
on Late Monday, the Bank of Canada Governor Stephen Poloz said the
governing council actively discussed the possibility of further
stimulus if needed. "Monetary policy has room to maneuver and we
are ready to use that room," he said.
"The decision on whether to cut rates again is not one to take
lightly."
Poloz also said that monetary policy is less effective when
interest rates are low, and uncertainties keep the bank from
cutting rates.
Crude for December delivery is down by 0.05 percent or $50.47
per barrel. The crude oil price fell on speculation the c will soon
raise interest rates.
Doubts about whether OPEC and Russia will finalize a deal to
curb supplies also weighed on crude oil.
Iraq said it will not join OPEC quotas as it looks to make up
for years of supply interruptions brought on by war.
Monday, the Canadian dollar showed mixed trading against its
major rivals. While the loonie fell against the U.S. dollar, the
euro, and the Australian dollar, it held steady against the
yen.
In the Asian trading, the Canadian dollar fell to 1.3363 against
the U.S. dollar and 78.01 against the yen, from an early 4-day
highs of 1.3278 and 78.49, respectively. If the loonie extends its
downtrend, it is likely to find support around 1.35 against the
greenback and 77.00 against the yen.
Against the euro and the Australian dollar, the loonie dropped
to 1.4529 and 1.0169 from an early 4-day highs of 1.4443 and
1.0101, respectively. The loonie may test support near 1.47 against
the euro and 1.02 against the aussie.
Looking ahead, the German Ifo business climate index for October
is due to be released at 4:00 am ET.
In the New York session, U.S. FHFA house price index for August,
U.S. S&P Case-Shiller house price index for August, U.S.
consumer confidence index for October are slated for release.
At 10:35 am ET, Bank of England Governor Mark Carney is
scheduled to testify about the economic consequences of the Brexit
Vote before the House of Lords Economic Affairs Committee, in
London.
At 11:30 am ET, European Central Bank President Mario Draghi is
expected to speak about stability, equity, and monetary policy at
the German Institute for Economic Research, in Berlin.
At 1:20 pm ET, Atlanta Fed President Dennis Lockhart is expected
to speak to the Opportunity Finance Network about "Lending and
Investing in Community Development" in Atlanta.
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