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USD/CAD below 1.04 again on Speculation U.S. Fed May Sustain Stimulus

The Canadian dollar joined most major peers in rising against its U.S. counterpart on speculation Chairman Ben S. Bernanke will signal the Federal Reserve is in no hurry to slow monetary stimulus.

The currency ended two days of losses before Bernanke testifies to Congress tomorrow. The U.S. central bank has been buying $85 billion of assets per month while holding its short-term interest-rate target at almost zero. Bank of Canada Governor Stephen Poloz will keep the benchmark interest rate at 1 percent tomorrow as he releases his inaugural monetary policy report, according to a Bloomberg survey of 20 economists.

“The dollar’s on the back foot against everything because people are just squaring up before Bernanke tomorrow,” said Greg Anderson, head of global foreign-exchange strategy at Bank of Montreal, by phone from Toronto. “The Canadian dollar had not performed nearly as well as other commodity currencies up until 11 a.m. due to technical reasons. And then the technical picture changed.”

Bloomberg [1]

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