Carney Says Rate Increases Not “Preordained”

Bank of Canada Governor Mark Carney said yesterday that just because the Bank recently raised interest rates by a quarter point, that does not mean that further rate hikes are “preordained”. Citing the Euro debt crisis and lingering weakness in the US economy, Carney stated that while Canada will likely lead the G8 nations in growth for the remainder of the year, this alone does not mean further rate increases are a sure bet.

“Arguably Carney left no clear direction yesterday,” Firas Askari, head currency trader in Toronto at Bank of Montreal, Canada’s fourth-largest lender, said in an e-mail. “The Canadian dollar is weaker against the crosses as there appears to be big U.S. dollar bids around the C$1.0210 to C$1.0220 area.”

The Canadian currency traded at C$1.0244 per U.S. dollar at 7:52 a.m. in Toronto, compared with C$1.0243 yesterday. It has strengthened to C$1.0225 three times in the last four days, the highest level since May 14. One Canadian dollar buys 97.70 U.S. cents.

Source: Bloomberg

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