USD/CAD around 1.0650 on Fed Taper Bets

The Canadian dollar traded at almost a three-year low amid speculation Federal Reserve officials may signal the central bank will slow its monetary stimulus program as soon as next week.

The currency weakened against most of its major peers as data showed the pace of Canadian new-home construction slowed in November. St. Louis Fed President James Bullard said in a speech the odds of slowing the central bank’s $85 billion of monthly bond-buying have risen, and Dallas Fed President Richard Fisher said tapering the purchases needs to begin soon and done on a “well-defined calendar.”

“The Fed calls for tapering sooner are strengthening the dollar across the board,” said Chris Gaffney, co-chief investment officer at EverBank Wealth Management, by phone from St. Louis. “It’s wait and see, as with most of the markets, but with a bias toward selling.”


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