By TraderVox.com
Tradervox (Dublin) – The Canadian dollar has been on a bearish trend for the last four days but prospects of economic growth in the country have boosted the loonie against its US counterpart. Traders and analysts are expecting the Bank of Canada to signal that the economic conditions improved during the release of its monetary policy next week.
The Canadian Dollar was up against the US dollar after a report showed that Canadian housing starts accelerated in March. Further, the gains in equity futures and commodities boosted the demand for riskier assets that pushed the loonie up against the dollar.
The market is quite optimistic about the Canadian dollar with most economists holding the view that the economic conditions in the country have improved. Analysts and economists expect the Bank of Canada to revise its domestic and international outlook upward due to improvements observed in the recent past. The economic upturn in US and the rest of the world should be enough signs for the BOC members to give positive outlook. Considering the housing starts, which rose to 215,600 in March according to Canada Mortgage and Housing Corp, it would be appealing for the BOC governor to revise the economic outlook.
The loonie has advanced by 0.2 percent against the dollar to trade at C$1.0023 per US dollar. It had earlier fallen to C$1.0053, the lowest it has been since January 31. This increase is seen as a result of optimism of growth, where traders expect the BOC to report an economic growth in its next week’s report. The Bank of Canada Governor Mark Carney had indicated in April second that the nation’s economy was stronger than they had earlier projected. The April 17 meeting is aimed at setting the interest rates for the country and they will release a report of the meeting the next day on April 18.
Economists are expecting the Canadian dollar to register a increase against the US dollar expecting one US dollar to cost 98 cents by the year end.
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