Canadian dollar stabilizes after seven-day growth in anticipation of decisions by the Bank of Canada and the Fed on rates.
Canadian dollar stabilized against the American one on Monday after seven consecutive sessions of growth. Investors took a pause before interest rate decisions by the Bank of Canada and the US Federal Reserve System, which are to be announced later this week.
The rate was practically unchanged at 1.4010 Canadian dollars per US dollar, corresponding to 71.38 American cents. During the trading session the pair fluctuated in the range from 1.3999 to 1.4055.
The seven-day growth streak became the longest for the Canadian currency since March 2022. On Friday the rate reached its strongest intraday value since September 16 at 1.3966, but then partially retreated.
Market participants are positioning themselves ahead of the Bank of Canada monetary policy decision expected on Wednesday October 28. Markets allow for a possible rate hike as the regulator assesses the risk of accelerating inflation due to rising energy prices. At the same time weaker domestic economic prospects may complicate the central bank's choice.
The rate is also influenced by the dynamics of the US dollar given Canada's role as a major energy exporter. Changes in geopolitical tensions can affect oil prices and demand for the US dollar as a safe-haven asset.
The Federal Reserve monetary policy decision also scheduled for Wednesday will be another key event for currency traders. Rate prospects in both countries will likely determine the short-term direction of the Canadian dollar.