TORONTO: The Canadian dollar strengthened against its US counterpart on Thursday, rebounding from an earlier 10-day low, as oil prices steadied and investors weighed prospects of additional Bank of Canada interest rate hikes.
Stocks rose and the price of oil stabilized, having suffered tailpins in the previous session as the United States ratcheted up trade war threats on China.
US crude oil futures settled 0.1 percent lower at $70.33 a barrel.
Canada exports many commodities, including oil, and runs a current account deficit so its economy could be hurt if the flow of trade or capital slows.
The steadier profile for oil helped investors focus on the message the Bank of Canada sent on Wednesday about the prospect of additional rate hikes.
"The bank is serious about removing accommodation," said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets. "I think that is more of a
factor in the medium term than a one day move in oil prices."
The central bank raised rates on Wednesday for the fourth time since July 2017, bring borrowing costs to 1.50 percent -about halfway back from ultra-low levels of 2015 to a neutral rate that neither boosts nor hinders growth.
Comments
Comments are closed.