The Canadian dollar gained the most in almost a year versus its U.S. peer as Bank of Canada Governor Stephen Poloz in his first public comments reiterated his predecessor’s view that rates will rise as the economy grows.
The currency briefly weakened before extending gains as Poloz, who took office on June 3, said he expects a recovery in foreign demand to boost exports. He added that he won’t give “running commentary” on whether the nation’s currency is overvalued. The unemployment rates in Canada and the U.S. are forecast to remain unchanged when they are reported tomorrow.
“Poloz showed no willingness to take action to weaken the Canadian dollar,” Adam Button, a currency analyst at Forexlive.com in Montreal, said in a telephone interview. “The traders who piled into U.S. dollar longs over the last month are getting absolutely mangled.” A long position is a bet an asset will increase in value.
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