Canadian dollar gets boost from governor Poloz

• After falling to 1.2670 against the dollar yesterday, near its two week low the loonie has snapped back sharply over the comments from Bank of Canada (BOC) governor Stephen Poloz.

• The governor poured cold water over the speculation of a further rate cut, in its next monetary policy meeting in March fourth.

• He commented the recent rate cut by 25 basis points have given BOC some time to assess the impact of the cut & fall in crude prices.

• The speech is of high importance, as Mr. Poloz usually hands out guidance over upcoming decisions & from today the blackout period starts, where the members are not allowed to speak over policy.

Analogy & reaction -

• Canadian dollar has gained sharply, currently trading at 1.244 against dollar, up 0.39% on the day. Toronto Stock index is trading at 15164, fairly stable over the comments.

• Canada despite being a diverse economy, its currency remains trapped over oil price & may continue to do so.

• Canadian dollar is currently moving in sideways trade which may continue so until further queue comes from oil or BOC.

• Nevertheless at this loonie valuation, stock market may experience portfolio inflows.