The Canadian dollar was soft against its US peer as Bank of Canada Governor Stephen Poloz indicated that he will keep monetary policy accommodative for an extended period of time. The currency gained against the euro and the Japanese yen.
Poloz voiced his concern about downside risks to inflation, which was persistently below the 2 percent target, yesterday:
Inflation has persistently been below target. Any negative inflation shock would bring us even further away from target, as opposed to getting closer, and in that context we decided that we should no longer have an explicit bias towards higher interest rates.
It looks like Poloz is much less hawkish than Mark Carney has been. This is not helping the Canadian currency.
USD/CAD traded at about 1.0463 as of 239GMT today after rallying from 1.0443 to 1.0466 yesterday. EUR/CAD was down from 1.4386 to 1.4375. CAD/JPY ticked up from 93.76 to 93.82.
If you have any questions, comments or opinions regarding the Canadian Dollar,
feel free to post them using the commentary form below.