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Reuters - www.reuters.com
FOREX NEWS - Canadian dollar hits the skids while sterling surges
FOREX-Canadian dollar hits the skids while sterling surges
Canadian dollar slides as dovish BOC calls for lower currency
Pound jumps as falling unemployment brings rate hike closer
Eyes on China's manufacturing sector report
Jan 23 (Reuters) - The Canadian dollar wallowed at four-year lows early on
Thursday after the Bank of Canada all but begged the market to sell the
currency, while sterling took off as investors priced in an earlier start to
rate hikes in the UK.
loonie traded at C$1.1086 per U.S. dollar after falling as far as C$1.1092 and
bringing its decline this year to 4 percent. It fell nearly 7 percent for the
whole of 2013.
pound gained even more, jumping 1.8 percent to its highest since mid-2009 at
C$1.8385. Sterling was on a tear after a sharp drop in UK unemployment added to
the case for an early tightening.
contrast the Bank of Canada took a leaf out of the Reserve Bank of Australia's
(RBA) play book and tried to talk down the loonie, saying a still strong
currency posed an obstacle to exports. It also said it had become more
concerned about weak inflation.
seems as though Governor Stephen Poloz may revert back to the BOC's easing
cycle as the persistent slack in the real economy continues to drag on price
growth," said David Song, analyst at DailyFX.
the same time, the BOC made it increasingly clear that a further depreciation
in the Canadian dollar should further assist with the rebalancing of the real
echoes the RBA which spent much of last year complaining about the strength of
the Australian dollar. Its efforts played a part in a 14-percent slide in the
Aussie, however, appeared to have found good support below 88 U.S. cents and
could build on that base after data on Wednesday showed surprisingly robust
inflation at home.
saw the outcome as greatly reducing the scope for another interest rate cut,
driving the Aussie back up towards 89 cents. It was last at $0.8849.
the Aussie can break above 89 cents depends on a closely watched report on
China's manufacturing sector due at 0145 GMT.
signs of a further slowdown in Australia's single biggest export market could
see the Aussie's rebound come to an abrupt halt.
other major currencies were trapped in familiar ranges overnight amid a lack of
fresh impetus in the lead up to the Fed's Jan. 28-29 policy meeting.
is talk the U.S. central bank will further reduce its bond-buying programme as
the world's biggest economy continued to recover.
an outcome should provide a floor for the U.S. dollar, which firmed slightly
against a basket of major currencies to be near a two-month peak set on
euro eased to $1.3547, not far from a two-month trough of $1.3508 plumbed on
Monday. Against the yen, the common currency was little changed at 141.63,
while the dollar edged up to 104.55.
the Bank of Japan dismissed the need for additional monetary easing, dampening
expectations for more stimulus to offset the impact of a sales tax rise in
© Thomson Reuters 2011. All rights reserved.
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