The Canadian dollar fell to a seven-week low after Bank of Canada Governor Stephen Poloz said he would extend a three-year pause in interest-rate increases.
The currency erased a gain versus its U.S. counterpart as Poloz told a House of Commons committee in Ottawa that “substantial” monetary stimulus in place remains appropriate as a weak U.S. recovery damps demand for Canadian commodity exports. The Canadian dollar tumbled by the most since June last week after the central bank dropped a bias toward higher interest rates it had included in every policy statement for more than a year and held the benchmark rate at 1 percent for the 25th consecutive meeting.
“The Governor’s comments seem to be in line with the tone of the interest-rate announcement that fed into a weaker Canada last week, and plays part and parcel with the move here,” Matthew Perrier, director of foreign exchange at Bank of Montreal, said by phone from Toronto.
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