By TraderVox.com
Tradervox.com (Dublin) – The Canadian dollar made the biggest quarterly advance against the greenback after global central banks added stimulus to spur global economic growth, spurring the demand for riskier assets. The loonie also increased in September after the Federal Reserve Bank embarked on a third round of quantitative easing program aimed at injecting $40billion each month to spur employment growth in US. The Canadian government bonds declined in the quarter after the Mario Draghi, the European Central Bank President, introduced a bond-buying program that have reduced the demand for safe haven assets. Economists are predicting a lowered employment growth in Canada last month.
Eric Lascelles, who is the Chief Economist at Royal Bank of Canada in Toronto, indicated last week that the third quarter has seen a lot of central banks in the world fighting back with policy makers delivering impressive promises. Eric showed optimism about global economy saying that the progress made in Europe and the performance of commodity related currencies is indicative of changing investor confidence in the market. The global stocks performance has also improved with the Standards and Poor’s Index increasing by 5.8 percent in the quarter; the index had registered a 3.3 percent decline in the previous quarter. The crude oil futures increased by 8.5 percent this quarter.
The Canadian dollar increased as the Bank of Canada held it lending rate at one percent, where it has been since September 2010. Mark Carney, the BOC Governor, said that an increase may be necessary as domestic product is driving the economic recovery which has been limited by global demand for exports. The Canadian dollar has improved by 3.4 percent in the quarter to trade at 98.37 cents per US dollar, making the largest gain since the first quarter in 2010. The loonie had dropped in the previous quarter by 1.8 percent. The currency has added 0.3 percent in September but made a weekly decline of 0.7 percent.
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