News Column

Canadian Dollar Rises Against Yen, US Dollar Ahead Of BoC Decision

September 3, 2014

CANBERA (Alliance News) - The Canadian dollar firmed against the US dollar and the Japanese yen in European deals on Wednesday, as traders await the Bank of Canada's interest rate decision, due shortly.

The central bank is seen holding benchmark rate at 1.00%, where it stood since 2010. The central bank has shifted to neutral stance with respect to the timing and direction in the next change to the policy rate, meaning cuts are as likely as rate hikes.

There are indications of strong growth in economy, helped by a boost in exports and business investment, but the central bank is not likely to alter course until it is convinced growth has momentum and is sustainable.

Recovering from an early low of 95.95 against the yen, the loonie advanced to an 8-month high of 96.40 and held steady thereafter. Continuation of bullish trend may push the loonie to a resistance around the 98.00 region.

Having fallen to a 1-week low of 1.0942 against the US dollar in early deals, the loonie reversed direction with pair trading at 1.0906. The loonie is likely to test resistance around the 1.085 area.

Meanwhile, the loonie extended its decline against the aussie, falling to a 1-week low of 1.0196. Next key downside target for the loonie may be eyed around the 1.025 level.

After falling to a 1-week low of 1.4360 against the euro at 12:00 am ET, the loonie bounced off slightly and was steady in subsequent deals. The pair was valued at 1.4350 at Tuesday's close.

Looking ahead, the US factory orders data for July and the Federal Reserve's Beige book report are due in the New York session.

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Source: Alliance News

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