Canadian Dollar Plummets as Economy Slows
Posted by Edward Dy on May 30th, 2008
|
A government report showing an unexpected slowdown of the Canadian economy during the first quarter sent the Canadian dollar on a downward trail for more than three weeks. This brought about speculation that the central bank will be paring down lending rates next month.
Photo Credit: Strange Ones
The Canadian dollar came down hard as the weakness of the US economy spills over the border. The central bank of Canada has cut, by a half-percentage point, the target lending rate to 3 percent on April 22. Since December, borrowing costs have been pared down no less than four times from 4.5 percent. Policy makers will decide in a meeting June 10 as to what the new rates will be.
The Canadian currency, or the loonie, devalued 0.8 percent to 99.50 Canadian cents against the US dollar from 98.77 yesterday. Having declined 0.5 percent, the currency now buys $1.0052.
“It’s a bit of a shock for investors. A weakening economy plays into the current concerns that the U.S. slowdown is severely affecting Canada,” said senior currency strategist Matthew Strauss, RBC Capital Markets, Toronto.
TradingSolutions:Financial analysis and investment software that combines technical analysis with neural network and genetic algorithms.
Commercial Forex Trading Secrets Revealed
Play to Win $50,000 - Fantasy Stock Trading Game
Forex Trading Courses