The loonie fell 0.7 per cent to $1.3439 per U.S. dollar, touching the weakest since Jan. 4 and paring its 2019 advance to 1.5 per cent
The Canadian dollar tumbled to the weakest level since the opening days of 2019, and the nation’s government-bond yields sank, after the Bank of Canada dropped its assertion that interest rates need to rise amid signs of slowing economic growth.
The Bank of Canada left its benchmark rate at 1.75 per cent Wednesday, as expected, and cited “increased uncertainty about the timing of future rate increases.” Traders have now all but ruled out a rate hike this year and see a 15 per cent chance of a cut by July, data compiled by Bloomberg show. A report showing weakening manufacturing on Wednesday magnified the worsening economic outlook.
The central bank’s dovish tilt came after fourth-quarter data released last week showed the economy practically ground to a halt.
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