The Canadian dollar touched 13-month high against its US counterpart today as Forex traders hoped that the Federal Reserve will start the third round of asset purchase program, known as quantitative easing. Overall, the currency was flat today.
The Fed will start the two-day policy meeting tomorrow. The central bank will announce its decision on September 13. Investors increased their bets on stimulus from the Fed after poor non-farm payrolls last week. That was positive for the Canadian currency.
The negative factor for the loonie (as the Canadian currency is nicknamed for the image of the waterfowl on the C$1 coin) was speculation that the German Constitutional Court will delay its decision about the European Stability Mechanism. The court confirmed that it is going to announce its ruling tomorrow, dispersing the rumors.
USD/CAD traded at 0.9731 as of 22:02 GMT today, following the drop from 0.9728 to 0.9714 — the lowest level since August 4, 2011. EUR/CAD was at its opening of 1.2505 and CAD/JPY was flat at 79.89.
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