Canadian Dollar Trades at Almost 3-Year Low on Rate Speculation
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The Canadian dollar traded at an almost three-year low after Bank of Canada Governor Stephen Poloz said interest rates would not change for “quite some time” amid speculation the Federal Reserve will slow stimulus.
The currency fluctuated against its U.S. peer as the interest rate advantage of Canada’s two-year bonds compared with U.S. counterparts dropped to 77 basis points, the narrowest spread since Sept. 4, limiting the relative appeal of the Canadian dollar-denominated debt. U.S. policy makers meet on Dec. 17-18 amid speculation the Federal Open Market Committee will slow bond purchases used to keep borrowing rates low.