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The Canadian dollar dropped as its U.S. counterpart advance against most other currencies after Federal Reserve Chairman Ben S. Bernanke said risks to the economy have decreased and policy makers could end bond purchases in the middle of next year.
‘Moderate’ Purchasing
The Fed may “moderate” its pace of bond purchases later this year and may end them around mid-2014, Bernanke said at a press conference in Washington.
‘On Target’
A pick-up in foreign demand for Canada’s exports, particularly in the U.S., is critical to bolstering confidence, Poloz said in a speech to the Oakville, Ontario, Chamber of Commerce. The Bank of Canada can help by keeping inflation “predictable, stable and on target” and providing information about the economy and the central bank’s “monetary policy response.”
Policy Bias
“What you can take away from his comments is you’re seeing growth accelerate, and that’s a good reason to be bullish on the Canadian dollar,” Adam Button, a currency analyst at Forexlive.com in Montreal, said of Poloz’s remarks in a telephone interview. “The idea before he came in was that he would be a dove, but if anything we’re seeing the opposite.”
Wholesale-sales receipts rose 0.2 percent to C$49 billion ($48 billion), Statistics Canada said in Ottawa, after a revised 0.1 percent gain in March. Economists surveyed by Bloomberg News forecast sales would climb 0.3 percent, the median of 15 responses, from an initially reported 0.3 percent gain in March.
The Canadian dollar has relinquished 1.3 percent in the past month among 10 developed-nation currencies tracked by the Bloomberg Correlation Weighted Indexes. The dollars of fellow commodities exporters Australian and New Zealand lead backsliders, down 7 percent and 5 percent. The U.S. dollar gave up 1 percent. The yen bolstered 5.7 percent to lead gainers.
