By Commodity News Service Canada
WINNIPEG, March 18 – The Canadian dollar moved sharply lower against the US dollar on Tuesday, after Bank of Canada governor Stephen Poloz made dovish remarks about Canadian interest rates going forward, analysts said.
Poloz said during a speech that he expects inflation was lackluster during the month of February 2014, adding that interest rates will remain low going forward. He also said he wouldn’t rule out cutting interest rates if it was necessary in the future.
The Canadian dollar closed at US$0.8979 US$1=C$1.1137 on Tuesday, which compares with Monday’s North American settlement of US$0.9047 or US$=C$1.1053.
Read Also
Canadian Financial Close: Loonie, TSX on the rise
Glacier FarmMedia — The Canadian dollar gained some ground on Wednesday. The loonie closed at US$0.7275 or US$1=C$1.3746, compared to…
Spillover pressure from the declines seen in gold prices added to the weakness in the Canadian dollar, though strength in crude oil limited the downside.
Some support also came from positive Canadian manufacturing data. Statistics Canada reported Canadian manufacturing sales rose 1.5 per cent in January, the fastest pace of growth in 11 months.
Canadian bonds moved higher in reaction to Poloz’s dovish statements during a news conference on Tuesday, market watchers said.
The two-year bond yielded 1.007% late Tuesday, from
1.029% late Monday. The 10-year bond yielded 2.406%, from
2.431%. Bond yields fall as their prices rise.
