Loonie seesaws ahead of Bank of Canada announcement
The Canadian Press
Posted: Oct 22, 2012 10:37 AM ET
Last Updated: Oct 22, 2012 4:15 PM ET
The Bank of Canada's wording of its statement Tuesday morning will be carefully scrutinized for clues about its plans for raising rates in the future. (Sean Kilpatrick/Canadian Press)
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The Canadian dollar seesawed Monday, a day before the Bank of Canada makes its next announcement on interest rates.
The loonie traded mostly below its Friday close during the day but its official Bank of Canada close was 100.75 cents US, up 0.09 of a cent.
There isn't any doubt about what the Canadian central bank will do about interest rates — it's widely expected the bank will leave its key rate unchanged at one per cent.
But there is speculation about what the bank will have to say about raising rates in the future. And that means its statement Tuesday morning will be carefully scrutinized for small changes in wording.
"After Governor Carney's dovish speech on October 15th, markets are increasingly pricing in the risk that the bank shifts from hawkish to neutral by omitting the reference that 'some modest withdrawal of the present considerable monetary policy stimulus may become appropriate'," said Scotia Capital chief currency strategist Camilla Sutton.
Traders also digested an announcement Friday that the federal government has rejected a Malaysian state-owned energy giant's proposed takeover bid for Calgary-based natural gas producer Progress Energy Resources.
Petronas had offered $6 billion for Progress, but Industry Minister Christian Paradis said he was "not satisfied that the proposed investment is likely to be of net benefit to Canada."
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