Daily FX Commentary
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Daily FX Commentary
Tue, Oct 21 2008, 12:13 GMT
Investica Ltd
Growth cycle hurts Canadian dollar
The Canadian dollar was unable to hold stronger than the 1.18 level against the US dollar on Monday and there was a renewed decline to 1.1980 in late US trading as the US currency rallied.
The principal short-term focus will be on the Bank of Canada interest rate decision. Markets are expecting a further 0.50% to 2.00% which would tend to keep the currency on the defensive, although the bank may want to be more cautious, especially as there was a 0.50% rate cut earlier this month.
A reduction of less than 0.50% would provide immediate relief for the currency. The Canadian dollar will still be hampered by the underlying deterioration in global growth conditions, especially if there is a further decline in commodity prices.
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Tue, Oct 21 2008, 12:14 GMT
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Investica Ltd
http://www.investica.co.uk | tim.clayton@investica.co.uk
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