As Carney Suggests Pared Growth Outlook, Canadian Dollar Falls
The Canadian dollar over the past three months has suffered a great deal, it weakened the most against against its U.S. peer after Bank of Canada Governor Mark Carney suggested he may reduce his economic outlook and delay raising policy interest rates.
The loonie, as the currency is nicknamed for the image of aquatic bird on the C$1 coin, fell against almost all of its most-traded peers after Carney’s comments yesterday that his quarterly economic forecast next week will reflect a prolonged global recovery. Dalton McGuinty said yesterday he is stepping down as Ontario premier amid controversy over canceled power plants and an inability to implement budget cuts.
Carney's comments yesterday being far less hawkish than previous ones has market reevaluating their expectation for an interest rate hike in Canada.
Another factor is the political uncertainty existing in Ontario at the moment, Ontario is a province currently facing some predicaments and it's a large and important province for the Canadian economy.
Meanwhile there are subtle undertones that it is important for the Canadian dollar even though the federal side is far more important.
Canada’s currency weakened for a third day, falling 0.6 percent to 98.61 cents per U.S. dollar at 2 p.m. in Toronto. It declined as much as 0.73 percent, matching the biggest intraday decline since July 23. One Canadian dollar buys $1.0141.
Oil, the country’s largest export, declined 1 percent to $91.74 a barrel. The Standard & Poor’s Index climbed 0.9 percent, the most in a month. The S&P GSCI Index of 24 raw materials declined 0.1 percent. - MoneyTalks
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