The Canadian dollar rose to a two- week high versus its U.S. peer amid gains in crude oil, the country’s largest export, and speculation the U.S. will maintain stimulus and the European Central Bank will cut interest rates.
The currency fell against the dollars of fellow commodity exporters Australia and New Zealand before data tomorrow forecast to show Canada’s gross domestic product grew 0.2 percent in February, matching January’s pace. Italy ended a two- month political stalemate as Prime Minister Enrico Letta was sworn in. Investors bet the Federal Reserve will decide this week to keep buying bonds under quantitative easing and the ECB on May 2 will lower its benchmark interest rate. Stocks rose.
“Ahead of the Fed and ahead of the ECB, we see some strength both in the euro and the Canadian dollar,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada (NA), by phone from Toronto. “For the Canadian dollar, one can look at the pickup in crude-oil pricing as well as the pickup in equities, along with the inference the Fed will remain steady on quantitative easing.”
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