The Canadian dollar dropped to a six-week low after after Federal Reserve meeting minutes showed officials in broad agreement to start tapering bond purchases later this year.
Canada’s currency fell for a fourth day, the longest decline since June, as the minutes pointed to consensus on an exit from record stimulus that had fueled demand for riskier assets. Fed officials were “broadly comfortable” with Chairman Ben S. Bernanke’s plan to start reducing bond buying later this year if the economy improves, with a few saying tapering might be needed soon, minutes of their last meeting show.
“Now that some of the uncertainty around the Fed is removed, pent-up cash is finding its way into the U.S. dollar,” Adam Button, a currency analyst at forexlive.com, said by phone from Montreal. “The commodity bloc in general is vulnerable and that will weigh on the Canadian dollar. At the moment, the story is purely dollar strength.”
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