The Canadian dollar touched the lowest level in more than three years versus its U.S. counterpart on speculation the chances of a cut in the Bank of Canada’s benchmark lending rate are rising.
The currency fell against the majority of its most-traded peers before a central-bank meeting tomorrow, when policy makers are projected to leave the benchmark interest rate unchanged. A report last week showed third-quarter economic growth was the fastest in two years even as exports fell, frustrating the Bank of Canada’s expectations for trade to drive growth. U.S. Federal Reserve officials may consider trimming monthly bond purchases at their Dec. 17-18 gathering.
“The divergent view in monetary policies in Ottawa compared to Washington will keep the loonie weak,” said Joe Manimbo, a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co. “Whether there’ll be a rate cut tomorrow, the upside bias for dollar-Canada remains unchanged.”
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