The Canadian Dollar traded at a 1-month high after the US Federal Reserve cut interest rates by half a percentage point to 3 percent increasing Canada's interest rates advantage over the US. ''The Canadian dollar looks good on a short-term basis,'' said Steve Butler, director of foreign exchange trading at Scotia Capital Inc. in Toronto. ''We'll see a little bit of a boost just on an interest-rate differential. I don't see the Canadian dollar doing a whole lot better. It may touch 98.50 cents per US dollar in the next day or so.'' The Bank of Canada cut its interest rate by a quarter of a percentage point to 4 percent on the 22nd of January. In an emergency move the same day, the Federal Reserve cut its federal funds target by three-quarters of a percentage point, prompting the Canadian Dollar to hit a 1-month high. The US borrowing rate is lower than Canada's for the first time in three years.
In forex trading buyers supported the Canadian Dollar, hitting a 1-month high by rising up to 0.5 percent to 99.31 Canadian cents per US Dollar, up from yesterday's 99.84.
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