By Commodity News Service Canada
Winnipeg, January 22 – The Canadian dollar continued to ease relative to the US dollar at midday Thursday, with the Bank of Canada’s surprise decision to cut interest rates on Wednesday behind the weakness.
The Bank of Canada unexpectedly cut its key interest rate to 0.75 per cent, from its previous one per cent. Pre-report guesses called for the bank to maintain the one per cent rate. The Bank of Canada also expects Canada’s real gross domestic product growth will slow to 1.5 per cent during the first half of 2015 due to falling oil prices.
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At 11:43 CST Thursday, the Canadian dollar was trading at US$0.8087 or US$1=C$1.2366, which compares with Wednesday’s North American close of US$0.8107 or US$1=C$1.2335.
Further downward pressure came from news that the European Central Bank is implementing a stimulus program that will include buying 60 billion euros worth of sovereign bonds a month, analysts said.
However, a firmer tone in commodity prices, including a rebound in crude oil and stronger gold values, tempered the downside.
The Toronto Stock Exchange was up 164.82 points, or 1.13%, at 11:43 CST Thursday, to sit at 14,725.24.
