Friday, December 19th0.6°C
24124
23875

Canadian dollar rises, traders find reassurance on rates from Fed minutes

The Canadian dollar closed higher Wednesday, adding to a recent string of advances as the release of the minutes of the last Federal Reserve meeting eased concerns about the pace of interest rate hikes and pushed the greenback lower.

The loonie gained 0.42 of a cent to 91.98 cents US after running ahead 0.39 of a cent on Tuesday.

Two weeks before the Fed's regular meeting March 18-19, the Fed held an unusual and previously unannounced video conference to debate the issue of rates, according to the minutes.

In the end, the Fed settled on an open-ended approach — that even after employment and inflation are nearly back to normal, short-term rates may need to stay unusually low for a while because the economy isn't completely healthy.

Stock and bond investors read the minutes to signal that the Fed plans to favour low short-term rates longer than many had assumed.

The minutes covered the first Fed meeting at which Susan Yellen presided as chair, as well as the March 4 video conference. At both sessions, the issue of the language the Fed uses in its statements to signal the timing of future policy actions was a topic of extended debate.

The Fed has kept its key short-term rate at a record low near zero since December 2008. It made no change to that rate at the March meeting. But it dropped language from its statement that had previously said this rate would likely remain low "well past" the time unemployment fell below 6.5 per cent.

Instead, the Fed said it would review a "wide range of information" before starting to raise rates. It repeated language that it expected to keep rates low for a "considerable time" after it stops buying bonds.

The loonie is now at a three-month high and has advanced 3.4 per cent just since March 20.

Camilla Sutton, chief FX Strategist at Scotiabank (TSX:BNX), said there were a number of reasons for the recent lift.

"The more positive shift has come from a string of better than expected and improving domestic data releases (GDP, inflation, labour and trade) and Monday's Bank of Canada business outlook survey that confirmed that businesses are increasingly optimistic as the impact of a weak Canadian dollar combines with a U.S. recovery to support growth," she said.

Prices were mixed on the commodity markets with May crude on the New York Mercantile Exchange up $1.04 to US$103.60 a barrel.

May copper was down one cent to US$3.04 a pound, while June gold bullion fell $3.20 to US$1,305.90 an ounce.

The Canadian Press


Read more Business News

23041


Recent Trending




Today's Market
S&P TSX14346.75+133.36
S&P CDNX665.50+6.47
DJIA17778.15421.28
Nasdaq4748.396+104.085
S&P 5002061.23+48.34
CDN Dollar0.8619-0.0015
Gold1197.70+3.00
Oil54.75+0.64
Lumber336.00-0.90
Natural Gas3.551-0.091

 
Okanagan Companies
Pacific Safety0.13+0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.28+0.01
Cantex0.03-0.005
Anavex Life Sciences0.17+0.0041
Metalex Ventures0.055+0.005
Russel Metals26.00-1.18
Copper Mountain Mining1.57+0.03
Colorado Resources0.12+0.015
ReliaBrand Inc0.011-0.0089
Sunrise Resources Ltd0.055+0.005
Mission Ready Services0.225+0.005

 
23744


23981

FEATURED Property
21250142 Bedroom, 1 bathroom single wide with workshop
$49,850
more details
image2image2image2
Click here to feature your property
Please wait... loading


My final thoughts on real estate

This will be the last column I write on real estate. Largely because at the end of the year I will be handing in my license. After 20+ years of working in land development, resort development and rea...


Reflecting on the end of the year

The importance of the end of the year and the Christmas holidays is profound. It is a time to reconnect with family and traditions that have made us who we are. But the year-end has always been a time...


Parenthood: Estates, insurance & taxes

It is now even more important to ensure your loved ones are well looked if anything should happen to you. Here are a few topics to consider helping you prepare for some of the unexpected events that c...

_



24111




Member of BC Press Council


23546