Interest rate speculation helps Canadian dollar, euro

At midday in New York on Tuesday, the Canadian dollar had added 0.8 percent in relation to the US dollar to trade at C$1.0715 to the greenback, its highest level in 29 years. Even though the Bank of Canada held interest rates there at 4.25 percent, analysts expect that there will likely be a hike in rates in July.

The euro was stronger on the session as well, also on interest rate expectations, after a European Central Bank official made remarks indicating that the ECB will not be reticent to increase rates to control inflation. The shared currency rose to a new record high against the Japanese yen at ¥164.33, while it gained 0.3 percent versus both the US dollar and sterling, to $1.3496 and £0.6802 respectively.

Japan’s unemployment rate was down unexpectedly, spurring new speculation that interest rates there could rise soon. This sent the yen higher against the US dollar, but it soon fell back to trade even against the greenback at ¥121.70.

Story link: Interest rate speculation helps Canadian dollar, euro