Canada Dollar Drops to Lowest in 3 Years on Below-Target CPI
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The Canadian dollar plunged to the lowest level in three years after the inflation rate remained below the central bank’s target band for a second month.
The currency erased losses versus its U.S. peer as investors bet faster-than-forecast economic expansion in the U.S., Canada’s largest trade partner, will also boost growth north of the border. Canada’s legal tender fell for the fourth time in five weeks after the U.S. Federal Reserve said Dec. 18 it would begin cutting bond-buying next month. Bank of Canada Governor Stephen Poloz cited low inflation risks in dropping his bank’s bias to raise interest rates earlier this year.