Dollar gains on rate hike speculation
The Canadian dollar soared Thursday after a Bank of Canada official again hinted at the possibility of raising interest rates.
The dollar closed up .79 of a cent at 101.99 cents U.S.
In a speech in Winnipeg, senior deputy governor Tiff Macklem repeated that the bank rate could rise as the economy recovers.
"To the extent that the economic expansion continues and the excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate," Macklem said.
The rate has been at one per cent for more than two years.
The bank has forecast Canada’s economy could be at full capacity late next year.
Some economists are sceptical the bank could raise rates amid a continuing debt crisis in Europe and weakness in the U.S. economic recovery.
A clue of how the Canadian recovery is doing will come tomorrow, when Statistics Canada releases employment data for September.
Job creation in July rose faster than most economists had predicted.
The loonie’s rise came a day after it slumped .39 of a cent, its lowest level in almost a month, amid signs that slowing growth in China could affect demand for Canadian commodities.