The Canadian dollar CADUSD strengthened against its U.S. counterpart on Thursday for a second straight day as equity markets climbed and the Bank of Canada said there is a limit to how much U.S. and Canadian interest rates can diverge.
The loonie was trading 0.4% higher at 1.3685 to the U.S. dollar, or 73.07 U.S. cents, after trading in a range of 1.3681 to 1.3742.
“The Canadian dollar has clearly been benefiting from broad USD selling on the back of the stock market recovery,” said Erik Bregar, director, FX & precious metals risk management at Silver Gold Bull.
Wall Street’s main indexes advanced, a day after the Federal Reserve left interest rates unchanged and signaled a dovish tilt, with focus moving to a crucial job report on Friday.
The loonie has been pressured in recent weeks by a wider gap between U.S. and Canadian yields as investors anticipated a delayed start to Fed rate cuts.
There is a limit to how far U.S. and…
