Forex News – Canadian dollar up against U.S. dollar after BofA deal with Buffet

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The Canadian dollar has been strengthening against the U.S. dollar since the open of the New York trading session, reacting to news that Warren Buffet’s company Berkshire Hathaway would invest $5 billion in Bank of America. This lifted market sentiment since the move may shore up the company in the same way as Buffett helped prop up Goldman Sachs during the financial crisis of 2008.

In a statement released on Buffet’s move, Bank of America said it would sell Berkshire 50,000 shares of cumulative perpetual preferred stock with a 6 percent annual dividend.

The euro also rallied on the news to climb against the dollar, though EURUSD fell again as the euphoria quickly faded and focus is back on Fed Chairman Ben Bernanke’s speech at a central bankers meeting in Jackson Hole, Wyoming tomorrow where he will reveal whether there will be further quantitative easing or not.

Meanwhile the dollar surged to a two-week high against the yen, peaking at 77.28 by 14:30 GMT due to this change of market consensus regarding Bernanke’s stance on monetary policy and now the speculation has shifted to Bernanke refraining from signalling a new round of bond purchases to stimulate the economy.