Canadian Dollar Extends Rally As Poloz Backs Rate Hike Move
June 13 2017 - 6:35AM
RTTF2
The Canadian dollar continued to be higher against its major
counterparts in early New York deals on Tuesday, after the Bank of
Canada governor Stephen Poloz remarked that the nation's interest
rates are too low for an economy that had emerged from the oil
price shock.
In an interview with CBC Radio, Poloz indicated that rates have
been "extraordinarily low" and the bank's previous rate cuts have
"done their job."
"What that suggests to us is that the interest rate cuts we put
in place in 2015 have largely done their work," Poloz added.
His comments echoed those made by the BoC Deputy Governor
Carolyn Wilkin on Monday, when she cited "pretty impressive"
first-quarter GDP growth and argued the need to reconsider ultralow
interest rates in place.
"As growth continues and, ideally, broadens further, Governing
Council will be assessing whether all of the considerable monetary
policy stimulus presently in place is still required," Wilkins
said. "At present, there is significant monetary policy stimulus in
the system."
Investors a slew of central bank meetings this week for
directional clues.
The Fed is widely expected to hike its fed funds rate by 25
basis points, but investors will parse the policy statement for any
fresh hints on the pace of further tightening.
The Bank of England and the Bank of Japan will announce their
monetary policy decisions on Thursday and Friday, respectively.
U.S. Attorney General Jeff Sessions will testify in public to
the Senate Intelligence Committee later today to explain his role
in the Russia investigation.
The loonie has been trading in a positive territory in the
previous session.
The loonie strengthened to near a 2-week high of 0.9963 against
the aussie and a 2-month high of 1.3232 against the greenback,
compared to Monday's closing values of 1.0047 and 1.3324,
respectively. On the upside, 0.98 and 1.31 are likely seen as the
next resistance levels for the loonie against the aussie and the
greenback, respectively.
The loonie that closed Monday's trading at 1.4922 against the
euro and 82.49 against the yen climbed to a multi-week high of
1.4830 and near a 3-week high of 83.26, respectively. The next
possible resistance for the loonie is seen around 84.00 against the
yen and 1.46 against the euro.
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