The Canadian dollar rallied yesterday and reached the highest since November today versus the US dollar and the Japanese yen as the Federal Reserve plans to keep interest rates exceptionally low till at least late 2014.
The Federal Market Open Committee kept its main federal fund rate near zero yesterday. What’s more important, it extended its pledge to keep rates low till late 2014 (previously the FOMC pledged to maintain borrowing costs till mid-2013). Some analysts called it a ”quantitative easing 2.5″.
Commodities jumped to the upside after the statement, taking the loonie along with them. March futures for delivery of crude oil added 0.5 percent to $99.74 per barrel in New York. The Thomson Reuters/Jefferies CRB Index of commodities rose 0.5 percent.
USD/CAD went from 1.0045 to 1.0024, the lowest since November 1, as of 5:35 GMT today. CAD/JPY traded near 77.45 after it opened at 77.36 and reached 77.48 — the highest level since November 3. EUR/CAD rose yesterday, but fell from 1.3164 to 1.3143 today.
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