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The Canadian dollar rallied over 1,500 pips against the US dollar between January 20 and mid-March. This move marked a significant reversal and the end of a stellar depreciation of the CAD against the USD of over 5,000 pips which commenced in mid-2011. The recent strength in CAD was prompted by the Bank of Canada’s January 20 statement which displayed a neutral outlook on monetary policy, however also acknowledging the detrimental effects of lower oil prices.
The BOC’s January statement served a support base to falling CAD by showing that the bank does not need to ease monetary policy due ... (read more)