Canadian dollar drops nearly a cent after Bank of Canada rate decision
TORONTO - The Canadian dollar pulled back nearly a full cent after the Bank of Canada's decision to keep its key interest rate steady while lowering its forecast for inflation.
The loonie dropped 0.95 of a cent to settle at 90.19 cents US.
The central bank said inflation has been lower than expected and won't return to its ideal target of two per cent until 2016 â€” even though the domestic economy has shown signs of improvement.
Both competition in the retail industry and a lack of significant economic growth were cited as reasons for inflation remaining below target.
The commentary added pressure to the Canadian currency, which has already lost more than three cents U.S. since the end of 2013.
Disappointing trade and employment data has coupled with pressure from the U.S. dollar, which has risen as the U.S. Federal Reserve starts to cut back on its key stimulus measure, the massive monthly bond purchases that have kept long-term rates low.
"As expected, the (Bank of Canada) statement retains a broadly dovish flavour, although the bias as before remains broadly balanced between a possible rate reduction and potential increase," CIBC economist Peter Buchanan wrote in a note.
In commodities, the February gold bullion contract slipped $3.20 to US$1,238.60 an ounce.
The March crude oil contract on the New York Mercantile Exchange gained $1.76 to US$96.73 a barrel.
Read more Business News
- Tour operator condemnedBC - 8:47 am
- Firefighters fill boots w cashCentral Okanagan - 8:26 am
- Consultation for cell towers?Poll
- Tranquille Road celebrationKamloops - 9:56 am
|QHR Technologies Inc||1.37||+0.05|
|Anavex Life Sciences||0.223||-0.0031|
|Copper Mountain Mining||2.66||-0.02|
|Sunrise Resources Ltd||0.02||-0.005|
|Mission Ready Services||0.29||-0.01|
“Is this a fair offer from ICBC?”…. “How much should I settle for?”… “What is my claim worth?” These are just some of the questions I regularly get as...
Last night I was privileged to be able to speak at the Greater Westside Board of Trade business awards dinner. Photo: ContributedI talked about Innovation and Collaboration which are two very interes...
There will be a time when you will need to decide who you should appoint as executor of your Will. As well, there may be a time when you will be asked by someone to act as the executor of his or her W...