Forex News and Rumors – Afternoon Update

Bank of Canada Increasingly Optimistic

As expected, the Bank of Canada held the line on interest rates keeping its key rate at the historic low of 0.25 percent, and Governor Mark Carney also pledged to maintain this rate until the spring of 2010. What was not expected however, was the upbeat mood and the strong hint that – despite not saying so directly – the Bank believes the recession is all but finished in Canada.

“Stimulative monetary and fiscal policies, improved financial conditions, firmer commodity prices, and a rebound in business and consumer confidence are spurring domestic demand,” the Bank declared in its public statement. More

Bernanke’s Comments Boost the Dollar

Federal Reserve Chairman Ben Bernanke helped lift the dollar today after declaring that he has detected “notable improvements” in the economy while addressing Congress this morning in Washington. The dollar rose to $1.4178 per euro by mid-day in New York today, from $1.4231 yesterday. More

Canadian Dollar Weakens as Stocks, Oil Decline

The Canadian dollar – nick-named the “loonie” – fell against the US dollar today as declining stock prices and weakening oil prices prompted some investors to lock-in profits.

“Equities are turning aggressively from pre-open highs and commodities are also turning,” said Alexandre Belzile, director of foreign-exchange trading at Laurentian Bank of Canada in Montreal. “Overall it’s a big take-profit day on the risk trade, which has generated nice returns in about a week’s time.” More

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