TORONTO (Reuters) – The Canadian dollar rose to its strongest level in nearly one week against the greenback on Wednesday, before giving up some of its gains, bolstered by higher oil prices and the Federal Reserve’s promise to keep interest rates pinned near zero.
The Fed released new economic projections which showed interest rates on hold through at least 2023, with inflation never breaching 2% over that time.
“The message is dovish, dovish, dovish,” said Michael Goshko, corporate risk manager at Western Union Business Solutions. “The Fed’s emphasis on U.S. interest rates being low for longer … might just give the green light to Canadian dollar bulls.”
The price of oil, one of Canada’s major exports, jumped following a drawdown in U.S. crude and gasoline