Canada's Dollar Strengthens

Canada's dollar rose for the first time in three days as traders speculated the U.S. Federal Reserve will slash its benchmark lending rate by a full percentage point.,Bloomberg 3/18/2008 6:59:17 AM

The currency gained as the nation's inflation rate minus food and energy costs accelerated last month for the first time since June.

Canada's dollar rose 0.4 percent to 99.37 cents per U.S. dollar in Toronto at 9:14 a.m., from 99.79 cents yesterday. One Canadian dollar buys $1.0063.

The currency fell 0.9 percent yesterday as losses at U.S. financial companies and an emergency reduction by the Federal Reserve in its discount rate raised concern that the world's largest economy is heading into a recession.

Traders see a 92 percent likelihood the Fed will cut its overnight lending rate by 1 percentage point at today's meeting, to 2 percent, futures on the Chicago Board of Trade showed. There is an 8 percent chance the rate will be lowered 1.25 points. The Fed unexpectedly reduced the so-called discount rate it charges commercial banks for loans by a quarter-point to 3.25 percent at the weekend.