The Canadian dollar advanced today on hopes that signs of economic growth will encourage policy makers to become bolder and reduce monetary accommodation, the move that they were promising for a long time.
Statistics Canada reported that wholesale sales grew 2.3 percent in May, the largest rate of growth since the beginning of 2011. Analysts have predicted that the sales would expand with the same rate as in April — 0.4 percent. Tomorrow’s report is expected to show that annual inflation accelerated to 1.2 percent last month from 0.7 percent the month before.
Policy makers were cautious at yesterday’s meeting and complained about the “slack in the Canadian economy”. At the same time, they revised growth projections for this year from 1.5 percent up to 1.8 percent.
USD/CAD dropped from 1.0402 to 1.0375 as of 21:32 GMT today after rallying to 1.0438 earlier. EUR/CAD went down from 1.3653 to 1.3602, while CAD/JPY advanced from 95.67 to 96.82 — the highest level since June 11.
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