BLBG: Canadian Dollar Fluctuates as Europe Seeks Solution in Cyprus
The Canadian dollar fluctuated against its U.S. peer as European policy makers weighed how far to push Cyprus after the island nation rejected an unprecedented levy on bank deposits, jeopardizing a financial bailout.
The Canadian dollar erased earlier gains as German Chancellor Angela Merkel said in Berlin that Cyprus must change its banking business model. The currency rose as much as 0.3 percent versus the greenback before a report tomorrow forecast to show Canada’s retail sales increased in January after contracting the prior month. The U.S. Federal Reserve is projected to keep its benchmark interest rate at zero to 0.25 percent in its policy decision today, according to all 43 economists in a Bloomberg survey.
“Merkel’s statements led to a more risk-off sentiment, which has driven U.S. dollar strength, more than Canadian dollar weakness,” said David Doyle, a strategist at Macquarie Capital Markets in Toronto. “The loonie is in wait-and-see mode.”
The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, was little changed at C$1.0268 per U.S. dollar at 11:03 a.m. in Toronto. It has traded between C$1.0238 and C$1.0279, the tightest range since March 12. One loonie buys 97.39 U.S. cents.
To contact the reporters on this story: Taylor Tepper in New York at ttepper2@bloomberg.net; Ari Altstedter in Toronto at aaltstedter@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
