Currencies
Loonie Rally That Defies Bank of Canada Rate Cuts to Persist
- Options traders near the most bullish on currency since 2009
- August was the Canadian dollar’s strongest month this year
When the Bank of Canada eases monetary policy and the economy slows, money managers usually brace for a weaker loonie.
Yet, the Canadian dollar is fresh off its best monthly gain so far in 2024. And options traders expect it to rally even more despite the country’s gloomy economic outlook — the unemployment rate is at its highest in two years and consumers are strained, racking up credit card balances. Those conditions have the BOC poised on Wednesday to cut interest rates for a third-straight time this year as it moves to lower borrowing costs.