CANADA DOLLAR TOUCHES HIGHEST IN WEEK ON CHINA ECONOMIC REFORMS The Canadian dollar rose to the strongest level in more than a week as the outlook for the nation’s commodity exports improved with China’s pledge to expand economic freedoms. The Canadian dollar reached its high of the day against the U.S. dollar after a report showed total foreign investment in Canadian securities rose to the highest level in five months. Global stocks gained after China’s leaders vowed to allow more private investment in state-controlled industries and expand farmers’ land rights as part of the biggest package of economic reforms since the 1990s. The loonie appreciated as much as 0.2 percent to C$1.0415 per U.S. dollar, the strongest since Nov. 7, before trading little changed at C$1.0435. One Canadian dollar buys 95.82 U.S. cents. Gains were limited before data this week forecast to show inflation slowed in October. Bank of Canada Governor Stephen Poloz’s testimony Nov. 20 to a Senate Committee on Banking, Trade and Commerce may reiterate his concern that consumer prices are stagnating, which prompted him to undo his predecessor’s stance toward higher interest rates on Oct. 23. “The outlook for this week in Canada is one where we’re reminded of the negative factors weighing on the Canadian dollar, namely CPI and Poloz,” Camilla Sutton, head of currency strategy at Bank of Nova Scotia, said by phone from Toronto. “Those two events could take away strength.” Economists reduced their Canadian bond-yield forecasts by the most in seven months after the nation’s central bank joined global counterparts Oct. 23 in renewing efforts to spur growth amid sluggish inflation. In the Oct. 23 policy statement after he left leave the benchmark interest rate unchanged at 1 percent, Poloz dropped language in place for more than a year about the need to raise interest rates, citing low inflation. Foreign investors offloaded C$2.8 billion of Canadian bonds in September, led by a C$3.73 billion drop in holdings of federal-government securities, Statistics Canada reported today. The decline was led by retirements, data showed. The U.S. dollar fell against most major peers as Federal Reserve Bank of New York President William C. Dudley said economic growth isn’t strong enough to reduce monetary stimulus. Dudley said in a speech in Flushing, New York, that he’s “getting more hopeful” the economy is gaining strength. Fed Chairman-nominee Janet Yellen underscored to U.S. lawmakers Nov. 14 at a confirmation hearing her commitment to strengthening the economy before slowing the central bank’s $85 billion in monthly bond-buying. The purchases, which have spurred investor risk appetite worldwide, tend to debase the U.S. currency. U.S. Dollar Index, which monitors the greenback against 10 major counterparts, fell 0.1 percent to 1,015.71 at 3:29 p.m. New York time, and touched 1,013.49, the lowest level since Nov. 7. The U.S. dollar was little changed at $1.3497 per euro after touching $1.3542, the weakest since Nov. 6. The U.S. currency dropped 0.3 percent to 99.91 yen after rising to 100.44 on Nov. 15, the strongest level since Sept. 11. Japan’s currency rose 0.3 to 134.86 per euro after depreciating to 135.40, the weakest level since Oct. 30. The pound fell versus all 16 of its major peers as investors awaited publication this week of minutes of the Bank of England’s most recent policy meeting, at which officials held interest rates at a record low. Sterling slipped from a three-week high versus the dollar after an industry report showed U.K. house prices declined this month. Details of the central bank’s November Monetary Policy Committee meeting are due on Nov. 20. Benchmark government bonds rose. Sterling slid 0.2 percent to 83.92 pence per euro. The pound bought $1.6112 from $1.6118 on Nov. 15. It earlier climbed to $1.6149, the highest since Oct. 28. The U.K. currency gained 0.6 percent versus the dollar last week. The euro drew some support after data showed the euro zones trade surplus grew more than expected in September. The euro was up 0.04 percent at 1.3501. The Australian dollar rose 0.13 percent to US$0.9380, while the New Zealand dollar gained 0.04 percent to US$0.8344. The MSCI World Index of developed-nation stocks reached the highest level since December 2007. The Standard & Poor’s 500 Index of U.S. equities rose above 1,800 for the first time before erasing gains and falling 0.2 percent. U.S. stock indices scaled record highs before retreating on Monday, buoyed by the prospect of continued Federal Reserve stimulus, while the dollar slipped and global equity markets climbed, driven by economic reform plans in China. The Dow and S&P 500 surged past the 16,000 and 1,800 milestones, respectively, although they subsequently lost their gains. Round numbers often act as resistance points for chartists, but clearing them can also provide momentum for investors eager to chase performance. Germanys DAX index finished at a all-time closing high of 9,225.43 as European shares resumed their rally on an improving outlook for the euro zone economy. MSCIs all-country world stock index rose 0.25 percent, while the pan-European FTSEurofirst 300 index rose 0.49 percent to close at 1,304.25
Posted on: Tue, 19 Nov 2013 18:48:34 +0000
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