Skip to main content
// //

The Canadian dollar rallied against its broadly weaker U.S. counterpart on Wednesday as the Federal Reserve signalled no intention to raise interest rates over the next year, bolstering the outlook for the global economy.

The U.S. central bank left the benchmark overnight lending rate in its current, historically low, target range between 1.50% and 1.75%. A solid majority of 13 of 17 Fed policy-makers foresee no change in interest rates until at least 2021.

“The Fed cemented the idea that U.S. rates will not go higher,” said Adam Button, chief currency analyst at ForexLive. “That is a great sign for global growth and the Canadian dollar is among the more risk sensitive currencies.”

Story continues below advertisement

Canada is a major exporter of commodities, including oil, so its economy could benefit from an improved outlook for global growth.

U.S. crude oil futures pared earlier losses to settle 0.8% lower at $58.76 a barrel, while Wall Street rallied and the U.S. dollar declined against a basket of major currencies.

At 3:49 p.m. (2049 GMT), the Canadian dollar was trading 0.5% higher at 1.3169 to the greenback, or 75.94 U.S. cents. The currency touched 1.3163, its strongest intraday level since data on Friday showed Canada’s economy shed more than 70,000 jobs in November.

Gains for the loonie were restrained by the potential for Bank of Canada Governor Stephen Poloz, who is due to speak on Thursday, to react dovishly to the jobs data, Button said.

Poloz’s speech will be the first since the Bank of Canada said he would step down when his seven-year mandate expires in June. Last week, the central bank left its benchmark interest rate unchanged at 1.75% as it pointed to early signs the global economy was stabilizing.

Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The two-year rose 2 Canadian cents to yield 1.658% and the 10-year was up 18 Canadian cents to yield 1.580%.

Canadian industries ran at 81.7% of capacity in the third quarter of 2019, down from 83.3% in the second quarter, Statistics Canada said. Economists had forecast a rate of 82.1%.

Story continues below advertisement

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies