Tuesday saw the Canadian dollar hovering in value against its southerly rival in anticipation of policy makers with the Bank of Canada preparing to release its decision on whether to boost interest rates on Wednesday, Bloomberg reports.
The central bank is unlikely to increase interest rates but the loonie pushed to its top rate against the world's reserve currency since the final day of last month.
"The market has gone from pricing in interest-rate hikes in Canada to pricing in the potential for interest-rate cuts over the next 12 months," currency strategy head Camilla Sutton with Bank of Nova Scotia in Toronto told Bloomberg on Tuesday. "I think they maintain an overall hawkish bias, though they continue to pare back that hawkish tone."
Minimized demand to increase interest rates is in play because the nation's economy is projected to need additional time to recover, according to commentary last month by central bank governor Mark Carney. This summer will see him transition to the Bank of England governor job.
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