USD/CAD near Four Year High at 1.0950

The Canadian dollar reached a four-year low for a second day on speculation the nation’s central bank may signal at a meeting next week the need for lower interest rates amid faltering economic growth.

The currency erased losses as crude oil, Canada’s biggest export, climbed amid a drop in U.S. inventories. The loonie, as the currency is called, has fallen this month against 15 of 16 major peers as interest-rate expectations between the U.S. and Canada diverged, with the Federal Reserve slowing monetary stimulus. Bank of Canada officials meet Jan. 22, when they will also release a quarterly report on their view of the economy.

“People are starting to get the view the Bank of Canada is certainly not going to be raising rates, but might actually turn more dovish or even open the door to rate cuts,” said David Watt, chief economist at the Canadian unit of HSBC Holdings Plc, by phone from Toronto. “You’re getting to the sell-Canada kind of story.”

Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.