MW: Canada’s Dollar Trades Near One-Week Low on Aversion to Risk
Canada’s currency traded near the lowest in a week as investor appetite for higher-yielding assets remained subdued, even as Australia and Japan unveiled measures to stoke economic growth.
News of the stimulus packages has “done very little to spur any life into the foreign-exchange risk trade,” said Matthew Perrier, a director of foreign exchange at BMO Capital Markets in Toronto. “I suspect we’ll be revisiting the top end of the four-month range, somewhere between C$1.27 and C$1.30, in the days ahead.”
The Canadian dollar declined 0.3 percent to C$1.2491 per U.S. dollar at 8:20 a.m. in Toronto, from C$1.2449 yesterday. The currency touched C$1.2523, the lowest since Jan. 23. One Canadian dollar buys 80.06 U.S. cents.
The Bank of Japan said today it will buy 1 trillion yen ($11.1 billion) of financial institutions’ shares. Australia unveiled spending measures worth A$42 billion ($26 billion) to bolster its economy.
Canada’s currency will weaken to C$1.26 against the U.S. dollar by the end of March before rebounding to C$1.20 by year- end, according to the median forecast in a Bloomberg News survey of 42 economists.
