• C$ posts biggest gain in 10 months as Bank of Canada cuts stimulus

    22 Apr 2021 | Economic News
  

C$ posts biggest gain in 10 months as Bank of Canada cuts stimulus

 

The Canadian dollar surged by the most since June 2020 against its U.S. counterpart on Wednesday and the Toronto stock market rebounded as investors welcomed a move by the Bank of Canada to dial back emergency support for the economy.

 

The loonie strengthened 0.9% to 1.2495 per U.S. dollar, or 80.03 U.S. cents. Canada's main stock index (.GSPTSE) ended 0.5% higher at 19,143.25, clawing back some of its decline over the previous two days.

 

"I think we are seeing positive sentiment toward the Canadian economy coming off the comments from the Bank of Canada today," said Colin Cieszynski, chief market strategist at SIA Wealth Management.

 

The Bank of Canada signaled that it could start hiking interest rates in late 2022, as it sharply boosted its outlook for the Canadian economy and cut the pace of bond purchases to C$3 billion per week from C$4 billion.

 

The central bank began a large-scale bond buying program last year to support the economy during the coronavirus crisis.

 

The reduction in stimulus puts Canada's central bank at odds with some other major central banks, such as the Federal Reserve and the European Central Bank, that have said they will maintain or even increase the pace of bond buying.

 

Canada's annual inflation rate doubled to 2.2% in March, Statistics Canada said, while the average of the Bank of Canada's three core measures was 1.9%, up from 1.8%.

 

The Canadian dollar, which touched its strongest intraday level since March 18 at 1.2455, was able to rally despite pressure on the price of oil, one of Canada's major exports.


Reference: Reuters

MTS Gold Co., Ltd.
40,42,44, Sapsin Road, Wang Burapha Phirom Sub-district, Pranakorn District, Bangkok, 10200
Tel. 0 2770 7777 Fax. 0 2623 9366 E-mail: support@mtsgoldgroup.com