Tuesday saw the value of the monetary unit of Canada climb against its southerly rival as speculation grew about intervention by central banks to spur economies passing through rough spots, according to Reuters.
As the sovereign debt crisis continues thrashing about economies, markets, banks and public finance systems in the euro zone, policy makers with the U.S. Federal Reserve convened their first of two days of meetings on Tuesday. The Canadian dollar soared to its highest value in four weeks against the world's reserve currency.
"Like most on the Street, we're looking for the Fed to introduce further easing measures at the conclusion of its two-day FOMC meeting tomorrow," states a client note authored by foreign exchange managing director Jack Spitz with National Bank Financial, according to Reuters.
Canadian bond prices were on the wane on Tuesday; two-year notes fell 11 Canadian cents while 10-year bonds saw losses of 50 cents.
Traders and investors are anticipating Operation Twist, the U.S. Federal Reserve's sale of $400 billion in short-term securities, is likely to be prolonged in some way by the Federal Open Market Committee when it adjourns on Wednesday, The Canadian Press reports.
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