Canadian dollar falls from 3-year high after BoC (UST10Y, UST2YR, TNX, TYX, BND, TLT, TBT, UST30Y, UUP, UDN, FXE, FXY, USDYEN, EURUSD, USDCAD, DXY) (by Deborah Levine)
NEW YORK (MarketWatch) -- The Canadian dollar turned down against its U.S. counterpart on Tuesday, after touching a three-year high, after the Bank of Canada quashed hopes that it would hint at an interest-rate increase coming soon. Policy makers repeated that "further reduction in monetary policy stimulus would need to be carefully considered." Policy makers noted exports continue to be challenged by the "persistent strength in the Canadian dollar" and poor productivity, and that underlying inflation pressure remain subdued. "In other words, they do not plan to raise interest rates anytime soon," said Kathy Lien, director of currency research for GFT. The central bank maintained its overnight target rate at 1%, as expected. The U.S. dollar rose 0.2% to buy 97.31 Canadian cents, after falling to 96.80 just before the policy announcement. Traders had been looking for some comments on the economic and policy outlook that would indicate a rate hike would be coming as soon as April, according to strategists at Citibank.