Canada’s Dollar Fluctuates After Carney Statement June 23rd, 2011

The Canadian dollar fluctuated after the dovish statement of the Federal Reserve and the speech of Mark Carney, Bank of Canada Governor. The speech of the Governor left mixed feelings, while the Fed statement was moderately negative for the currency.

Crude oil, the biggest export of Canada, dropped $1.11 to $94.30 per barrel on NYMEX after the Fed released its statement. Earlier, crude gained by $1.24 to $95.41 as the US stockpiles declined.
Carney was quite pessimistic about Canada’s economic growth in the near future in his statement:

In the short term, economic growth in Canada is expected to slow to modest rates, due to a number of temporary factors. These include the supply chain disruptions that will dampen automotive production, as well as the drag from adjusting to higher energy prices on consumer spending in Canada and the United States.

Looking further ahead, the Governor was more optimistic, saying:

The Bank expects a re-acceleration of growth in the second half of the year, consistent with a renewed narrowing of the output gap.

USD/CAD traded at 0.9727 today as of 00:17 GMT, falling after yesterday’s jump from 0.9710 to 0.9736. EUR/CAD slipped from 1.3978 to 1.3932. CAD/JPY rose to 82.65 after it fell on the previous trading session from 82.54 to 82.41.
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