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Canadian dollar slips after comments by Dodge

AlfredSokol said: "The Canadian dollar has been riding high against the US dollar. But comments from the director of Canada's central bank has stopped the [url=http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-09-26T134015Z_01_N26466394_RTRIDST_0_MARKETS-CANADA-DOLLAR-BONDS.XML]advance slightly[/url] [quote] n a Vancouver news conference on Tuesday, Dodge said the Canadian dollar's surge to parity with the U.S. dollar was not entirely justified by economic fundamentals, suggesting the central bank was fretting about the currency's rise. The market, which had previously priced in the chance of higher interest rates in the near to medium term, has had to reassess outlooks to take into account the impact of the recent credit crunch and the soaring currency. "I think (the bank is) going to be on hold certainly next month and there's probably a little bit of doubt creeping into the market's mind...about rate increases period," said Shaun Osborne chief currency strategist at TD Securities. The Canadian dollar last week reached parity with the greenback for the first time in 31 years, reflecting steady Canadian interest rates -- the Bank of Canada left its key rate steady at 4.50 percent in September -- and a U.S. Federal Reserve rate cut of 50 basis points to 4.75 percent[/quote] Canada is also on the verge of a major subprime meltdown of their own, so it will be interesting to see what happens next."