Thursday saw the value of the Canadian dollar climb against the world's reserve currency, spurred by a successful bond auction in debt-hobbled Spain, an interest rate cut in China and the aftermath of the monetary unit's strong performance from Wednesday, according to published reports.
The Canadian Press reports the central bank of China agreed to slash interest rates for the first time in nearly four years as a strategy of spurring its economy, which has endured some rough patches thus far this year. The economic system trails only that of the U.S. for size.
U.S. Federal Reserve Chairman Benjamin Bernanke is set to deliver testimony on Capitol Hill in Washington on Thursday, which might indicate whether the body he leads also will embark on monetary easing strategies.
"What Bernanke says is going to be key," senior dealer Chris Applin with Canadian Forex in London told Reuters on Thursday. "Growth prospects in the U.S. are obviously key for Canada and the prospect of QE3 is not particularly good for the U.S. dollar and since yesterday the (U.S.) dollar has been sold off on that basis."
A debt auction conducted by Spain raised the euro equivalent of $2.5 billion on Thursday. The loonie gained the most in one trading session in six months on Wednesday.
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