year low after breaching key levels
currency will strengthen when the Federal Reserve ends monetary stim guess canada ulus. Read more
The currency depreciated against the majority of its guess canada 16 most traded peers after Fed Chairman Ben S. Bernanke said last week poli guess canada cy makers may begin reducing their $85 billion of monthly bond purchases this year if the economy achieves the central bank’s objectives. Monetary stimulus tends to devalue a currency.
“Given the underlying price action and the sentiment out there in the market there’s still potential for Canada to continue to weaken off here and the dollar in general to strengthen,” said Matthew Perrier, director of foreign exchange at Bank of Montreal, by phone from Toronto. “I think you look for opportunistic corrections in the market to get in long guess canada dollar positions if you’re not in any.” A long position is a bet an asset will increase in value. in Toronto, after reaching its lowest level since Oct. 5, 2011. cents.
RelatedWorld faces storm as liquidity dries upWhen the Fed turns off the tap, it’s the rest of the world that suffers
Canada’s 10 year benchmark government bonds fell, with yields rising six basis points or 0.06 percentage point, to 2.51%. The 1.5% security maturing in June 2023 lost 51 cents to $91.21. stocks fell 1.5%. counterpart traded at 8.98%, the highest point in a year. Implied volatility, which traders quote and use to set option prices, signals the expected pace of currency swings.
The loonie touched the 100 percent Fibonacci retracement level of its appreciation in the past year, according to data compiled by Bloomberg. dollar level that would suggest there are additional losses ahead, according to George Davis, chief technical analyst for fixed income and currency strategy in Toronto at Royal Bank of Canada, in an e mail message.
The 14 day relative strength index versus the greenback fell to 29.92%, less than the 30% level some traders see as a sign an asset has weakened too quickly.