Canadian Forex Midday: C$ Down Sharply

By Commodity News Service Canada

Winnipeg, May 22 – The Canadian dollar moved sharply lower against its US counterpart at midday Wednesday, following a speech from the US Federal Reserve that was bearish for the Canadian unit, analysts said.

Ben Bernanke, US Federal Reserve Chairman, said the agency could reduce its stimulus programs if the US economy continues to show growth.

At 12:03 CDT Wednesday, the Canadian dollar was trading at US$0.9651, or US$1=C$1.0362, which compares with Tuesday’s North American close of US$0.9739, or US$=C$1.0268.

Weak Canadian retail sales were also bearish. According to Statistics Canada, March retail sales totalled C$39.5 billion, unchanged from February.

Ideas that the Bank of Canada will hold off on increasing interest rates even longer because of slow economic growth in the country further weighed on the loonie.

The Toronto Stock Exchange was up 129.10 points, or 1.01%, at 12:03 CDT Wednesday, to sit at 12,871.53.