canadian dollar strengthens vs U.S. in afternoon trading The Canadian dollar was little changed against the greenback on Wednesday morning as a lack of domestic economic data left the currency without much direction, though an overall improvement in market risk appetite gave the loonie some support. Worries over geopolitical tensions eased as U.S. President Barack Obama and leaders of the Group of Seven major industrialized nations agreed this week to hold off on tougher economic sanctions against Russia unless President Vladimir Putin takes further action to destabilize Ukraine or other former Soviet republics. In early afternoon trading the Canadian Dollar strengthened after breaching the technical 1.11 and broke lower to close at 1.1092. The brightening of sentiment helped the loonie continue to consolidate after it fell to a 4-1/2 year low last week. With no major economic data on the calendar until next week, analysts said the Canadian dollar is likely to be confined to a tight range. The Canadian dollar was at C$1.1092 to the greenback, slightly better than Tuesdays close of C$1.1159, or 89.61 U.S. cents. The loonie had been stronger in overnight trade, but those gains dwindled in morning action. It had risen alongside other growth and commodity currencies, including the Australian dollar, after Australias top central banker played down the risk of a sustained rise in domestic inflationary pressures. The pound strengthened the most in six weeks against the euro after Bank of England policy maker Martin Weale said U.K. interest rates should increase as the economy recovers. Sterling advanced for a third day versus the dollar as Weale told the Reading Post that “as the economy returns to normal, interest rates should return to more normal level.” The pound has outperformed all its 31 major peers in the past year on bets quicker growth will spur the central bank to bring forward rate increases. The European Central Bank is ready to take additional monetary policy measures, President Mario Draghi said yesterday. U.K. government bonds were little changed. The pound appreciated 0.4 percent to 83.27 pence per euro at 4:33 p.m. London time, the biggest gain since Feb. 12. The U.K. currency strengthened 0.2 percent to $1.6566 after rising 0.3 percent during the previous two days. Sterling has appreciated 10 percent in the past year, the best performer of 10 developed-nation currencies tracked by Correlation-Weighted Indexes. The euro gained 8.1 percent, while the dollar was little changed. Australia’s dollar climbed after Reserve Bank Governor Glenn Stevens said there are early signs the nation is in a transition from mining-led demand growth to domestic consumption and the economy may expand later this year. The Australian currency reached 92.45 U.S. cents, the strongest since Nov. 22, before trading at 92.24 cents, up 0.6 percent. U.S. stocks fell on Wednesday, led by renewed selling pressure in technology shares, while the dollar pared gains after an earlier rally on strong U.S. economic data. Gold remained near 5-week lows on a lack of physical bullion buying. Wall Street opened higher, trending with global equity markets, after U.S. President Barack Obama and his allies agreed to hold off on more damaging economic sanctions unless Moscow goes beyond the seizure of Crimea. Russia has already drawn a line in the crisis, saying it did not plan further incursions into Ukraine.
Posted on: Thu, 27 Mar 2014 12:47:46 +0000