Canadian Financial Close: C$ firm Wednesday following Fed cut

By Phil Franz-Warkentin

Glacier FarmMedia|MarketsFarm – The Canadian dollar was stronger on Wednesday, as currency traders reacted to a large interest rate cut in the United States.

The Canadian dollar settled at US$0.7358 or US$1=C$1.3590 on Wednesday, which compares with Tuesday’s close of US$0.7355 or US$1=C$1.3596.

The U.S. Federal Reserve cut interest rates by 50 basis points, taking some market participants who had anticipated a smaller 25-point cut by surprise. Ideas that the aggressive move by the U.S. will accelerate the pace of rate cuts elsewhere, including Canada, tempered any strength in the loonie.

Crude oil was weaker, with West Texas crude oil down by 1.42 per cent at US$70.18 per barrel.

The TSX Composite Index lost 85.10 points to close at 23,592.60 points.