The dollar was flat in Monday quiet trading, and bearish sentiment over the dollar was partially dissipated after surprisingly strong US non-farm payrolls released last Friday. However, European currencies will still be favored compared with the greenback, since the Fed has stopped monetary policy tightening while other central banks keep on raising rates.
The Canadian dollar, the biggest winner across the board today, hit a fresh 30-year low at 1.0447 against the dollar. Bank of Canada is likely to increase its interest rates by a quarter percentage point to 4.50% tomorrow. The central bank did not make any move since it raised its key rates to 4.25% in May 2006.
Besides, recent data showed Canada labor market is in good shape and manufacturing expanded. Also commodity prices are moving in the Canadian dollar’s favor.
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