The Canadian dollar gave back some of its recent gains against a firmer US dollar on Tuesday, after rising 3.4 percent versus its US counterpart over the previous three sessions on uncertainty surrounding the bailout of the US financial sector.
Canadian bond prices fell after data showed that core inflation rose more than expected in August, reinforcing the idea that the Bank of Canada will not be lowering interest rates any time soon.
The Canadian dollar fell 0.3 percent to end the North American session at C$1.0363 to the US dollar, or 96.50 US cents. That was down from C$1.0334 to the US dollar, or 96.77 US cents, at Monday's close. "After the recent sell-off, the US dollar is finding some stability," said Matthew Strauss, senior currency strategist at RBC Capital Markets.
Investors had been selling US dollars over concerns about how Washington was going to finance its planned $700 billion bailout for the US financial sector. US Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke warned members of the Senate banking committee of dire consequences for financial markets if the bailout package were delayed, although they gave few concrete details.
Comments
Comments are closed.