Investing.com - The Canadian dollar posted a third day of gains against its U.S. counterpart on Thursday, bolstered by sentiment the U.S. Federal Reserve will consider stimulating the economy via quantitative easing measures.
In Asian trading on Thursday, USD/CAD hit 1.0274, down 0.02%, up from a low of 1.0268 and off a high of 1.0293.
The pair sought to test support at 1.0232, the low of May 30, and resistance at 1.0426, the high of Jan. 13.
Weak jobs reports, choppy housing recovery, lackluster economic growth rates and other disappointing economic indicators have fueled talk that the Federal Reserve may announce quantitative easing measures later this month.
Under quantitative easing, the Fed buys assets from banks, injecting the economy with liquidity with the aim of pushing down long-term interest rates and fueling growth.
As a side effect, the dollar weakens.
Federal Reserve Chairman Ben Bernanke is due to speak in Congress later Thursday and the U.S. central bank's monetary policy body, the Federal Open Market Committee (FOMC), will meet next week to decide on interest rates and possibly on rolling out easing measures to jolt the economy due to weakness at home and abroad.
Some Fed officials hinted earlier that monetary easing may be needed.
"There are a number of significant downside risks to the economic outlook, and hence it may well be appropriate to insure against adverse shocks that could push the economy into territory where a self-reinforcing downward spiral of economic weakness would be difficult to arrest," Federal Reserve Vice Chair Janet Yellen said in prepared remarks delivered at the Boston Economic Club Dinner, Boston, Massachusetts.
"Some have expressed concern that a substantial further expansion of the balance sheet could interfere with the Fed's ability to execute a smooth exit from its accommodative policies at the appropriate time. I disagree with this view," Yellen added.
"The FOMC has tested a variety of tools to ensure that we will be able to raise short-term interest rates when needed while gradually returning the portfolio to a more normal size and composition."
Also in the U.S., the Federal Reserve released the Beige Book, which reflected a somewhat more optimistic view of the economy, which allowed the dollar to regain some gains.
The Canadian dollar, meanwhile, was up against the euro and up against the yen, with EUR/CAD down 0.12% and trading at 1.2913 and CAD/JPY up 0.19% at 77.21.
Later Thursday, Canada will publish a report by the Richard Ivey School of Business on its purchasing managers’ index.
Also Thursday, the U.S. will release government data on weekly initial jobless claims, while Fed Chairman Ben Bernanke is to appear before the Joint Economic Committee in Washington.
In Asian trading on Thursday, USD/CAD hit 1.0274, down 0.02%, up from a low of 1.0268 and off a high of 1.0293.
The pair sought to test support at 1.0232, the low of May 30, and resistance at 1.0426, the high of Jan. 13.
Weak jobs reports, choppy housing recovery, lackluster economic growth rates and other disappointing economic indicators have fueled talk that the Federal Reserve may announce quantitative easing measures later this month.
Under quantitative easing, the Fed buys assets from banks, injecting the economy with liquidity with the aim of pushing down long-term interest rates and fueling growth.
As a side effect, the dollar weakens.
Federal Reserve Chairman Ben Bernanke is due to speak in Congress later Thursday and the U.S. central bank's monetary policy body, the Federal Open Market Committee (FOMC), will meet next week to decide on interest rates and possibly on rolling out easing measures to jolt the economy due to weakness at home and abroad.
Some Fed officials hinted earlier that monetary easing may be needed.
"There are a number of significant downside risks to the economic outlook, and hence it may well be appropriate to insure against adverse shocks that could push the economy into territory where a self-reinforcing downward spiral of economic weakness would be difficult to arrest," Federal Reserve Vice Chair Janet Yellen said in prepared remarks delivered at the Boston Economic Club Dinner, Boston, Massachusetts.
"Some have expressed concern that a substantial further expansion of the balance sheet could interfere with the Fed's ability to execute a smooth exit from its accommodative policies at the appropriate time. I disagree with this view," Yellen added.
"The FOMC has tested a variety of tools to ensure that we will be able to raise short-term interest rates when needed while gradually returning the portfolio to a more normal size and composition."
Also in the U.S., the Federal Reserve released the Beige Book, which reflected a somewhat more optimistic view of the economy, which allowed the dollar to regain some gains.
The Canadian dollar, meanwhile, was up against the euro and up against the yen, with EUR/CAD down 0.12% and trading at 1.2913 and CAD/JPY up 0.19% at 77.21.
Later Thursday, Canada will publish a report by the Richard Ivey School of Business on its purchasing managers’ index.
Also Thursday, the U.S. will release government data on weekly initial jobless claims, while Fed Chairman Ben Bernanke is to appear before the Joint Economic Committee in Washington.