The Canadian dollar rallied yesterday and kept its gains today as the attractiveness of the currency was backed up by the good economic data from Canada and the positive sentiment on the Forex market.
Traders felt optimistic as Germany ceded to the pressure from other European countries and no longer opposes the bond-purchasing plan of the European Central Bank. Investors were happy to hear that the major obstacle was conquered. Federal Reserve Bank of Boston President Eric Rosengren said today in an interview that the Fed should pursue an “open-ended” monetary easing program. Perhaps, that is the sign that US policy makers are still considering quantitative easing.
The domestic fundamentals were also supportive for the Canadian currency. The Purchasing Managers’ Index of Richard Ivey School of Business was up from 49.0 in June to 62.8 in July. The yield on Canadian government bonds maturing in 10 years 9 basis points to to 1.84 percent.
USD/CAD was down from 1.0001 to 0.9968 and traded at about 0.9970 as of 1:30 GMT today. EUR/CAD fell from 1.2400 to to the close of 1.3257 and remained near that level after opening, CAD/JPY traded 78.76 on today’s trading session, following yesterday’s advance from 78.21 to 87.77.
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