USD/CAD below 1.10 on Economic Prospects

Canada’s currency strengthened beyond C$1.10 per U.S. dollar for the first time in more than two weeks as building permits climbed more than forecast, adding to signs the global economy is picking up.

The currency rose for a second day after the Bank of Canada kept its key interest rate unchanged yesterday and reiterated its next move depends on the progress of the economy. Global stocks gained as the European Central Bank held its benchmark rate unchanged and raised growth forecasts. U.S. jobless-benefit claims fell to the lowest since November even as a harsh winter has weighed on other reports.

“Every piece of data we’re getting is confirming weather has impacted growth but it hasn’t derailed growth, and globally central banks aren’t really moving away from their stance, and the Bank of Canada holds a very neutral tone, not a dovish tone,” Camilla Sutton, head of currency strategy at Bank of Nova Scotia, said by phone from Toronto. “All of that is very good for a pro-cyclical currency like the Canadian dollar.”

Bloomberg

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