Canadian Dollar Falls Following BOC Deputy Governor Lane's Remarks
The Canadian dollar weakened against other major currencies in the Asian session on Tuesday, after the Bank of Canada Deputy Governor Timothy Lane said that the currency's strength will be a factor in future rate decisions.
Speaking at Saskatoon, Saskatchewan, the BoC Deputy Governor Timothy Lane said, "We will be paying close attention to how the economy responds to both higher interest rates and the stronger Canadian dollar".
Lane also said that growth is becoming more broadly based and self-sustaining, while expanding imports of machinery and equipment and other intermediary goods are early signs of rising business investment.
Investors preferred to stay on the sidelines ahead of the U.S. Federal Reserve's two-day monetary policy meeting that begins later in the day.
In tha Asian trading, the Canadian dollar fell to near 2-week lows of 1.4751 against the euro and 0.9819 against the Australian dollar, from yesterday's closing quotes of 1.4688 and 0.9782, respectively. If the loonie extends its downtrend, it is likely to find support around 1.50 against the euro and 1.00 against the aussie.
Against the U.S. dollar and the yen, the loonie dropped to 1.2273 and 90.58 from yesterday's closing quotes of 1.2291 and 90.75, respectively. The loonie may test support near 1.20 against the greenback and 88.00 against the yen.
In the scheduled events today, Eurozone current account data and construction output for July and the German ZEW economic sentiment index for September are due to br released later in the day.
In the New York session, Canada manufacturing sales data for July, U.S. housing start and building permits for July and import price index for August are slated for release.