NEWS

Canadian dollar falls more than 1 cent ahead of Bank of Canada decision

01/20/2015 11:18 EST | Updated 03/22/2015 05:59 EDT
The Canadian dollar fell more than a cent against the U.S. dollar this morning — its lowest level since April 2009.

The loonie was trading at at 82.64 cents, down 1.11 cents from Monday's close, as of 10:30 a.m. ET Tuesday.

"The market is worried the Bank of Canada will hint at interest rate cuts tomorrow," says Adam Button, a currency analyst with ForexLive.com.

"It's an ongoing story of weakness in oil and strength in the U.S. economy that hasn't spilled across the border," adds Button.

Data released by Statistics Canada on Tuesday morning showed November manufacturing sales dropped 1.4 per cent, the third monthly decline in a row. That weak data is one of the last economic indicators to cross Bank of Canada governor Stephen Poloz's desk before he makes an interest rate announcement on Wednesday morning, says Button.

If the Bank of Canada hints that it might cut interest rates in the near future, the Canadian dollar could slide further.

The central bank has kept its key rate at one per cent for 34 consecutive decisions.

U.S. investment bank Morgan Stanley recently says it sees a 1 in 3 chance that the Bank of Canada will cut interest rates before year's end.

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