Currency trading with the loonie
The Canadian dollar is lower in forex trading on the currency market this morning, thanks to the latest round of retail sales data. Retail sales data came in lower for August, creating a currency trading problem for the loonie.
But it may not really be a problem after all. A strong loonie has been providing inflation issues for the Bank of Canada, which is working on an exit strategy from the easing used to help stimulate the economy. GFT’s Kathy Lien explains in FX360 why this turn of events might be better for the BoC:
If the Canadian dollar continues to strengthen, the BoC will only grow more uncomfortable but for the time being, they still believe that economic growth could beat their estimates in the second half of 2009. A stronger currency poses a risk to growth and to their goal of bringing inflation back to their target.
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