Loonie Loses Strength as Growth Projections Lowered
The Canadian dollar dropped against safer currencies today as both the Bank of Canada and the International Monetary Fund revised negatively their projections of Canada’s economic growth. The loonie managed to outperform the euro.
The Bank of Canada kept its main interest rate at 1 percent during today’s monetary policy meeting. The central bank said that the average growth in 2013 will be at 1.5 percent, down from the previous projection of 2 percent. Despite the negative news, BoC Governor Mark Carney mentioned that an interest rate hike is likely in future.
The hawkish stance of Carney was already known to traders, so they paid more attention to the downside revision of the projected growth. The IMF added to the woes of the Canadian currency as it has revised its forecast in the same manner, promising an annual growth by 1.5 percent.
USD/CAD went up from 1.0206 to 1.0267, while its daily high of 1.0292 was highest since March 13, and CAD/JPY ticked down from 95.50 to 95.20 as of 19:09 GMT today. Meanwhile, EUR/CAD declined to 1.3368 from the opening of 1.3448 and the intraday high of 1.3521 (the strongest since March 8).
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Earlier News About the Canadian Dollar:
- Loonie Tumbles along with Commodities (2013-04-15)
- Loonie Retreats on United States, Europe, and Commodities (2013-04-12)
- CAD Touches 7-Week High vs. USD (2013-04-12)
- Canadian Dollar Gains against Major Counterparts (2013-04-10)
- CAD Fluctuates amid Uncertainty About Canada's Economic Growth (2013-04-09)