This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
By mid-afternoon in New York, USD/CAD had risen 0.22% to 1.0465, after earlier touching its highest point since the beginning of September.
The weakness in the Canadian dollar came after Stephen Poloz, the governor of the BOC, spoke before the House of Commons Standing Committee on Finance in Ottawa.
The BOC trimmed its economic forecasts last week and dropped its tightening bias, which had been in place for over a year. Mr Poloz reiterated this more pessimistic view of the Canadian economy, saying that uncertain global and domestic economic conditions are delaying a recovery in in exports and business investment, which means economic activity has been lower than expected.
He also said that Canadian inflation has remained low in recent months, because of ‘significant slack in the economy’ and acknowledged that this persistent undershooting of the BOC’s inflation target means that downside risks to inflation ‘assume increasing importance’.
For these reasons, Mr Poloz said that ‘substantial monetary policy stimulus currently in place remains appropriate.’
The price of US crude oil futures fell 0.5% to $98.20 a barrel today. Crude oil is Canada’s biggest export.