Canadaâ€™s dollar strengthened to a 13-month high versus its U.S. counterpart, on optimism measures by policy makers in the U.S. and Europe will reduce volatility.
The currency gained for a fourth day as the Federal Reserve prepares to begin a two-day policy meeting where investors anticipate it will announce a third round of bond buying, known as quantitative easing, to spur the economy. A German court cleared the way for a ruling tomorrow on a European bailout plan. The anticipated price swings versus the U.S. dollar were almost the lowest in five years, according to options pricing.
â€œThe movement weâ€™ve seen in the Canadian dollar, weâ€™re a little suspicious of it because it seems to be part and parcel with the theory that more global stimulus is coming and therefore the market rallies,â€ said David Madani, an economist at Capital Economics Canada in Toronto. â€œGlobal monetary policy makers are trying to pull out all the stops right now.â€
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