The Canadian dollar has trimmed gains this morning against the US dollar after reaching a one-month high yesterday, as investors favour safe haven trading in the run up to the Bank of Canada interest rate decision. The Bank of Canada is expected to leave interest rates on hold, although better than expected signs from the economy mean we could see interest rate rises before the end of 2009. 

Investors are currently favouring a long position on the Canadian dollar, usually a sign of confidence that a currency will strengthen. Foreign exchange rates for the loonie have strengthened 21% since March, when the Canadian dollar hit a multi-year low against the US dollar. There are concerns that the currency is overvalued, rallying on the back of stock and commodity prices, and this could undermine Canadian recovery.

Foreign exchange rates for the Canadian dollar are currently at USD0.9237 and EUR0.6370. 

The rates quoted above are interbank rates. Client rates may vary according to the volume and timing of the trade.