USD/CAD Falls Below 1.04 as Carney Retains Bias to Raise Rates

The Canadian dollar rose against its U.S. peer for the first time in four days as outgoing Bank of Canada Governor Mark Carney left interest rates unchanged and retained his warning they could rise as economic growth progresses.

The currency strengthened from the lowest level in almost a year before data May 31 forecast to show the nation’s gross domestic product grew 2.3 percent at an annual rate in the first quarter, compared to 0.6 percent growth the previous period, according to a Bloomberg survey of 23 economists. Carney noted in his final policy meeting that first-quarter growth will probably exceed the bank’s April forecast of 1.5 percent. He will be succeeded by Stephen Poloz on June 3.

“When the statement turned unexpectedly a little bit more hawkish, and the BOC did not remove the tightening bias, those two events supported the loonie,” Adrian Miller, director of fixed-income strategies at GMP Securities LLC in New York, said in a telephone interview. “That’s why you’re seeing the loonie do a little bit better.”


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