Scotiabank chief currency strategist Shaun Osborne says 'risk aversion' was dragging the Canadian dollar lower after the BoC's bold move
TORONTO — The Bank of Canada's largest interest rate hike in 24 years caused the loonie to drop to a 20-month low as investors feared the U.S. Federal Reserve would mirror the full percentage point hike in two weeks.
"And so that just kind of put a flame under the dollar broadly, knocked commodities lower, knocked the S&P lower and I think it frankly just caught everybody off-guard," he said in an interview. The currency partially recovered Thursday to 76.29 cents US in afternoon trading after Fed governor Christopher Waller said the market was "kind of getting ahead of itself."
"The U.S. dollar remains so strong that no currency defies its strength," said Ipek Ozkardeskaya of Swissquote Bank SA.Scotiabank chief currency strategist Shaun Osborne said "risk aversion" was dragging the Canadian dollar lower after the Bank of Canada's bold move.
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