By Commodity News Service Canada
WINNIPEG, Jan. 22 – The Canadian dollar continued to plummet against the US dollar on Thursday, reacting to ongoing worries about slow global economic growth, analysts said.
On Thursday, the European Central Bank announced it will be implementing a stimulus program that will include buying 60 billion euros worth of sovereign bonds a month, analysts said.
The Bank of Canada unexpectedly cut its key interest rate to 0.75 per cent, from its previous one per cent on Wednesday. Pre-report guesses called for the bank to maintain the one per cent rate. The Bank of Canada also expects Canada’s real gross domestic product growth will slow to 1.5 per cent during the first half of 2015 due to falling oil prices.
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The Canadian dollar closed at US$0.8062 or US$1=C$1.2404 on Thursday, which compares with Wednesday’s North American settlement of US$0.8107 or US$1=C$1.2335.
A downward turn in crude oil values on Thursday afternoon added to the bearish tone, though firmness in gold helped limit the downside.
Canadian bonds were mostly higher on Thursday, continuing to find support from the Bank of Canada’s surprise interest rate cut on Wednesday, market watchers said.
The two-year bond yielded 0.553% late Thursday, from 0.559% late Wednesday. The 10-year bond yielded 1.426%, from 1.432%. Bond yields fall as their prices rise.
