Reuters: Canadian dollar weakens as investors unravel central bank rate signals
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The Canadian dollar weakened against its U.S. counterpart on Thursday after contrasting signals from the Bank of Canada and the U.S. Federal Reserve. The loonie traded 0.2% lower at 1.3805 per U.S. dollar, or 72.44 U.S. cents following interest rate cuts from both central banks the previous day. “Following the double header of central bank decisions, the Canadian dollar’s move back above 1.38 reflects a divergence in tone,” said Kevin Ford, FX & macro strategist at Convera. “A dovish Bank of Canada … and markets reading Fed Chair (Jerome) Powell’s remarks as unexpectedly hawkish have left the loonie vulnerable to further U.S. dollar strength,” referring to suggestions Macklem is leaning toward further rate cuts while Powell may be more likely to stand pat.
