The value of the Canadian dollar advanced against the U.S. dollar on Thursday in the aftermath of a top official with the Bank of Canada stating policy makers might be inclined to draw down monetary stimulus, according to Bloomberg.
One trading session after the monetary unit of Canada touched its lowest level in about one month against the world's reserve currency, the loonie also advanced as crude oil climbed. The energy commodity is the top export of the natural-resources-rich nation. Senior Deputy GovernorTiff Macklem said Canada's recovery might prompt monetary stimulus to be rescinded.
"I would suggest the outlook for global growth has deteriorated and continues to do so, however for most investors it's a matter of deciding whether it's the global growth outlook or monetary policy that matters," chief currency strategist Camilla Sutton with Scotiabank told the news source. "For us, it's Fed action, particularly Fed action versus the Bank of Canada's stance."
Bonds issued by the Canadian government fell as officials with the Bank of Canada prepared to release details about an auction of three-year bonds scheduled forWednesday of next week.
Macklem also noted the institution he serves is seriously considering an increase of interest rates, according to Reuters.
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