Canada’s dollar rose to a three-month high after the U.S. Federal Reserve unexpectedly refrained from reducing the $85 billion pace of monthly bond purchases and will keep pumping money into the economy to boost growth.
The central bank left unchanged its guidance that it will probably hold its target interest rate near zero “at least as long as” unemployment exceeds 6.5 percent, so long as the inflation outlook is no higher than 2.5 percent. The currency pared earlier losses versus its U.S. peer after Bank of Canada Governor Stephen Poloz said in a Vancouver speech that growing confidence has brought the country near a “tipping point” for companies to boost investment. Oil and stocks climbed.
“We were expecting $10 billion in U.S. Treasuries, and obviously we got nothing,” Charles St-Arnaud, a foreign-exchange strategist at Nomura Holdings Inc., said by phone from London. “It’s very positive for all types of risky assets.”
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