Canadian Dollar and Business Outlook: Loonie falls, interest rate unchanged

Glacier FarmMedia MarketsFarm – The Canadian dollar fell on Wednesday morning as the Bank of Canada (BoC) made its latest key interest rate announcement.

The loonie was at US$0.7317 or US$1=C$1.3666 as of 8:46 a.m. CDT, compared to US$0.7365 or US$1=C$1.3578 on Tuesday. The BoC said it will leave its key interest rate unchanged at five per cent. However, many observers believe the central bank will cut rates after its next announcement in June.

The United States Dollar Index jumped 0.79 of a point at 104.94. U.S. inflation rose to 3.5 per cent in March, slightly higher than what economists expected.

Crude oil prices were higher despite reports of expanding U.S. stockpiles. Brent crude oil increased US$0.43 at US$89.85 per barrel. West Texas Intermediate (WTI) was up US$0.42 at US$85.65/barrel.

The TSX/S&P Composite Index lost 236.21 points at 22,125.57.

Gold dropped US$15.80 at US$2,346.60 per ounce.