TORONTO (Reuters) - The Canadian dollar firmed slightly on Wednesday as investors turned their focus to the end of a U.S. Federal Reserve meeting and an expected announcement of further monetary stimulus.
Markets expect the Fed to expand its current asset purchase scheme, committing to buy $45 billion of U.S. debt and extend its purchases of mortgage-backed debt to help sustain the fragile U.S. economic recovery.
“All the risk currencies are performing well today,” said Adam Cole, global head of FX strategy at Royal Bank of Canada. “It’s a risk-on day generally....expectations for the Fed are probably behind that to a degree.”
Oil, gold and copper prices were all higher, at least in part on hopes for Fed action. <O/R><GOL/><MET/L>
At 7:44 a.m. the Canadian dollar was trading at C$0.9858 to the greenback, or $1.0144, compared with C$0.9862, or $1.0140, at Tuesday’s North American close.
The Canadian dollar was underperforming other resource-linked currencies including the Australian and New Zealand dollars, as well as the euro and British pound.
Canadian government debt prices were lower across the curve, with the two-year bond off 2 Canadian cents to yield 1.087 percent, while the benchmark 10-year bond fell 14 Canadian cents to yield 1.745 percent.
Reporting by Alastair Sharp