Canadian dollar holds near three-year high as investors weigh inflation risk

Canadian dollar holds near three-year high as investors weigh inflation risk

Reuters  | Feb 23, 2021 13:55

Canadian dollar holds near three-year high as investors weigh inflation risk

By Fergal Smith

TORONTO (Reuters) - The Canadian dollar was little changed against the greenback on Tuesday, holding near its strongest level in nearly three years as investors weighed prospects of higher inflation and the Bank of Canada said the rollout of vaccines would boost the economy.

The Canadian dollar was trading nearly unchanged at 1.2606 to the greenback, or 79.33 U.S. cents, having traded in a range of 1.2585 to 1.2647. On Monday, the loonie touched its strongest intraday level since April last year at 1.2576.

The U.S. dollar reversed early gains after a dovish speech from U.S. Federal Reserve chief Jerome Powell failed to quell inflation fears.

"An inflationary surprise would be wildly bullish for the Canadian dollar given the abundant resources in Canada," said Adam Button, chief currency analyst at ForexLive.

The price of oil, one of Canada's major exports, was trading close to its highest in more than one year on signs that global coronavirus restrictions were being eased. U.S. crude rose 0.1% to $61.75 a barrel.

Canada's economy will have a solid rebound in coming months as COVID-19 restrictions are loosened, and an expected ramp-up in vaccination is boosting confidence in sustained strong growth into 2022, Bank of Canada Governor Tiff Macklem told an Alberta business audience.

Still, Button said, there were no indications in the speech that Macklem intends "to tap the stimulus brakes any time soon."

© Reuters. FILE PHOTO: A Canadian dollar coin, commonly known as the

Canadian government bond yields were higher across a steeper curve. The 10-year touched its highest since February last year at 1.278% before dipping to 1.262%, up 3.1 basis points on the day.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (India) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes


Download the App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors. is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.