Newspaper article The Canadian Press

Loonie Up as Fed Chief Stands Behind Central Bank's Low-Interest Rate Policies

Newspaper article The Canadian Press

Loonie Up as Fed Chief Stands Behind Central Bank's Low-Interest Rate Policies

Article excerpt

Loonie up, Bernanke reassures on stimulus

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TORONTO - The Canadian dollar closed higher Wednesday as positive U.S. housing data and rising optimism in the durability of stimulus measures from the U.S. Federal Reserve helped traders put aside worries about the inconclusive results of Italy's election.

The loonie rose 0.32 of a cent to 97.75 cents US.

The greenback weakened as traders also took in a second day of Congressional testimony from U.S. Federal Reserve chairman Ben Bernanke. He sought to reassure Congress members that the central bank has a handle on the risks of the central bank's aggressive program to buy US$85 billion a month in Treasurys and mortgage bonds.

As he did on Tuesday, Bernanke expressed confidence that the central bank's low-rate policies currently pose little risk of causing runaway inflation or a stock market bubble.

Meanwhile, the National Association of Realtors said a measure of the number of Americans who signed contracts to buy homes rose in January from December to the highest level in more than two and a half years. Its seasonally adjusted index for pending home sales rose 4.5 per cent last month to 105.9.

Sales of previously occupied homes ticked up in January after rising to their highest level in five years in 2012.

The eurozone government crisis continued to be in focus after the centre-left alliance led by Pier Luigi Bersani narrowly won the lower house in Italy's elections, but failed to gain control of the upper house. …

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