The Canadian dollar posted its biggest gains against its U.S. counterpart in almost a month after four straight days of losses as the currency failed to fall below a key technical level.
The loonie, as the currency is nicknamed, hasn’t weakened past C$1.01 per U.S. dollar since the Bank of Canada scaled back growth forecasts on Jan. 23. The relative strength index for the currency versus the greenback indicated for the past three days the Canadian dollar’s recent decline may have been too far, too fast. The nation’s economy may have grown faster in November than the month before, according to a Bloomberg News survey of economists before a Jan. 31 report from Statistics Canada.
“The market, more or less, traded pro-risk most of the day,” said Darcy Browne, managing director of currencies at Canadian Imperial Bank of Commerce’s CIBC World Markets unit, by phone from Toronto. “I think it’s just taking its indications from what else is going on, and I think two or three days of pushing on that C$1.01 top without any joy, I think the market decided to take a little profit,” he said, referring to the U.S. dollar versus the loonie.