Canadian dollar notches six-week high as Bank of Canada turns less dovish

Wed Apr 12, 2017 5:30pm EDT
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By Fergal Smith

TORONTO (Reuters) - The Canadian dollar strengthened on Wednesday to a six-week high against its U.S. counterpart after the Bank of Canada turned less dovish, while comments by U.S. President Donald Trump weighed on the greenback.

The Bank of Canada did not even consider cutting interest rates as it left monetary policy unchanged on Wednesday amid signs of strong growth, but it is too early to conclude the economic growth is sustainable, Governor Stephen Poloz said.

"They are still sitting on the fence but feeling that the numbers are coming in a little bit better," said Hosen Marjaee, senior managing director, Canadian fixed income at Manulife Asset Management.

"We think that a rate hike may be a little bit earlier than we thought before."

The Bank of Canada will likely maintain its wait-and-see stance on monetary policy until early next year, a Reuters poll found last week.

The U.S. dollar .DXY fell against a basket of currencies after Trump said that the greenback was "getting too strong" and would eventually hurt the U.S. economy.

The Canadian dollar CAD=D4 ended at C$1.3273 to the greenback, or 75.34 U.S. cents, stronger than Tuesday's close of C$1.3332, or 75.01 U.S. cents.

The currency's weakest level of the session was C$1.3339, while it touched its strongest since Feb. 28 at C$1.3238.   Continued...

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015.  REUTERS/Mark Blinch