Canada’s dollar gained from almost a five-year low after the nation’s central bank said a long-awaited shift to an economy driven by exports and business investment may be under way.
The currency rose versus 15 or 16 major peers even as the Bank of Canada held the benchmark interest rate at 1 percent, where it has stayed since September 2010 in the longest pause in almost 65 years. Policy makers said while a slump in oil, the nation’s biggest export, would slow consumer-price gains, faster U.S. growth and a weaker Canadian currency were broadening the economic recovery to include more exporters.
“A lot of the headlines out of the very short statement we got from the Bank of Canada were notably more optimistic,” said Greg T. Moore, a senior currency strategist at Royal Bank of Canada, by phone from Toronto. “They fully acknowledged the output gap was smaller than the bank had projected in October, which wasn’t too long ago.”