USD/CAD Back Above 1.03 Before Fed Stimulus Update

The Canadian dollar fell from its highest level in a month on speculation Federal Reserve policy makers may provide clues tomorrow about when the U.S. central bank plans to slow monetary stimulus.

The currency weakened against the majority of its most-traded peers as the Fed is forecast to leave the benchmark interest rate at zero to 0.25 percent and continue its $85 billion per month bond-buying program. OAO Uralkali, the world’s largest potash producer, ended limits on production that have underpinned prices for Canada’s exports of the commodity. A report tomorrow will show Canada’s gross domestic product grew 0.3 percent in May compared with 0.1 percent the previous month, according to a Bloomberg survey of 20 economists.

“The gradual shift here is to some sort of policy normalization,” said Shaun Osborne, chief currency strategist at Toronto-Dominion Bank, by phone from Toronto. “It’s time to take the patient off life support as we keep saying, and just move it to intensive care.”


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