The Canadian dollar surged more than 1 percent against the greenback today after Carolyn Wilkins, Senior Deputy Governor at the Bank of Canada, said the current
“significant monetary policy stimulus in the system” may be reduced, citing the ongoing recovery of the Canadian economy.
In today’s speech to The Associates of the Asper School of Business in Winnipeg, Manitoba, Wilkins
said that the economy has adjusted to lower energy prices,
“One sign of progress in adjusting to lower oil prices is the bounce-back in capital expenditures in the oil and gas sector,” she explained.
In addition to the uptick seen in the oil and gas industry, Wilkins also cited improvements in the Canadian labour market, as well as growth in other industries:
“The data show that more than 70 per cent of industries have been expanding and the labour market continues to improve.”
Despite the numerous upbeat economic signs, Wilkins also mentioned the persistent slack in the Canadian economy, saying it hampered the central bank’s efforts to raise the inflation rate to 2 percent.
Wilkins’ remarks come just 30 days ahead of Bank of Canada’s next interest rate decision and monetary policy report!
After Wilkins’ comments on monetary stimulus were made public via a Bloomberg
report, the Canadian currency began to rally vigorously against the U.S. dollar. By the end of the New York currency trading session, the
USD/CAD exchange rate had dropped to its lowest level since April 19th: 1.33245.
And during the opening hours of the Asian FX trading session, the CAD made further gains against the dollar, trading as high as 1.33126 at 7:50 p.m. EDT:
CAD banknote photo by
Evan Bench
