By Commodity News Service Canada
WINNIPEG, March 19 – The Canadian dollar down sharply against the US dollar on Wednesday, reaching four-year lows. Tuesday’s dovish remarks from Bank of Canada governor Stephen Poloz continued to be bearish for the loonie, analysts said.
Poloz said interest rates will remain low fro now, and didn’t rule out cutting rates if it becomes necessary in the future, during a news conference on Tuesday.
The Canadian dollar closed at US$0.8893 US$1=C$1.1245 on Tuesday, which compares with Tuesday’s North American settlement of US$0.8979 or US$=C$1. 1137.
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Further downward pressure came from news that the US Federal Reserve plans to cut their stimulus program by another US$10 billion per month, to US$55 billion in April. US Federal Reserve Chairwoman also noted that interest rates in the US may rise during the first half of 2015, which was also bearish for the Canadian dollar.
Sharply lower gold prices further undermined the loonie, though strength in crude oil was somewhat supportive.
Canadian bonds moved down sharply, reacting to the US Federal Reserve’s statement that they would consider rising interest rates next year.
The two-year bond yielded 1.064% late Wednesday, from 1.007% late Tuesday. The 10-year bond yielded 2.478%, from 2.405%. Bond yields fall as their prices rise.
