Canadian Dollar

Globe and Mail Update Published on Thursday, Apr. 22, 2010 11:42AM EDT Last updated on Thursday, Apr. 22, 2010 1:05PM EDT


The Bank of Canada is now assuming the Canadian dollar(CAD/USD-I1.000.0010.13%) will stick near the parity mark.

The central bank has updated its projections about economic growth with the assumption the average value of the currency will be around 99 cents (U.S.). It previously thought the loonie would trade at about 96 cents.

The bank’s base-case projection, released Thursday in its monetary policy report, sees a “Canada/U.S. exchange rate averaging 99 cents U.S.” This is not a prediction, but rather an assumption the central bank makes in calculating its projections.

The revised assumption suggests the central bank believes the loonie’s strength is here to stay, rather than a short-term blip. On Thursday, the Canadian dollar traded around 99.88 cents. It has risen 5.1 per cent against the U.S. dollar this year and 13.3 per cent against the euro.