Canadaâ€™s dollar touched a one-year high versus its U.S. counterpart and outperformed all of its peers as investors anticipated the Federal Reserve will announce more stimulus this week to sustain growth in the nationâ€™s largest trading partner.
The Canadian currency rose against 14 of its 16 most-traded counterparts tracked by Bloomberg after Bank of Canada Governor Mark Carney said last week an increase in interest rates â€œmay become appropriate.â€ The Federal Open Markets Committee meets Sept. 12-13. The greenback has weakened 22 percent against the Canadian dollar since the U.S. central bank introduced its first round of so-called quantitative easing in December 2008.
â€œThe market is quite optimistic about the Fed unveiling some sort of quantitative easing and therefore we are seeing a fairly good overall tone,â€ Blake Jespersen, managing director of foreign exchange in Toronto at Bank of Montreal (BMO), said in a phone interview. â€œIt seems to be what all investors are talking about this week and positioning for.â€
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