USD/CAD back to 1.0660 on Bets Loses Overdone

The Canadian dollar appreciated for the first time in five days, rising from a more than three-year low, amid speculation employment growth may suggest stronger economic improvement than the Bank of Canada indicated.

The currency gained against most major peers as Canadian building permits increased more than forecast in October. A report tomorrow is predicted to show the economy added jobs for a fourth month in November. Canada’s currency fell yesterday to C$1.07 per U.S. dollar as the central bank warned of low inflation, spurring bets it will keep interest rates on hold as the Federal Reserve lets U.S. borrowing costs rise by trimming bond-buying.

“We have come too far, too quickly,” said Dean Popplewell, head analyst at the online currency-trading firm Oanda Corp., by phone from Toronto. “They’re anticipating stronger numbers — yes, that’s probably a fair comment — hence why the Canadian weakness certainly ran out of gas.”

Bloomberg

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