12/02/2014 03:16 EST | Updated 02/01/2015 05:59 EST

Canadian dollar knocked back as oil, gold slide

The Canadian dollar fell more than half a cent Tuesday to 87.67 as both crude oil and gold continued to slide.

The loonie was down 0.61 of a cent to 87.67 US at the close, after gaining almost a cent on Monday.

Canada’s currency continues to move with commodities, especially oil which fell $1.71 in New York to $67.29 US.

A higher U.S. dollar, lower global demand for crude and a glut of supply are working to push oil prices lower. OPEC’s decision last week not to cut back production to deal with the global oversupply accelerated a rout that began in September.

The main WTI oil contract traded in New York is now down 35 per cent from its mid-summer high.

Interest rate announcement Wednesday

On Wednesday, the Bank of Canada makes its next interest rate announcement. The central bank has kept interest rates steady for the last four years and despite signs of higher inflation in Canada, is not expected to change its stance.

Until the Federal Reserve moves to raise rates, likely sometime next year, Canadian interest rates are not expected to rise.

Gold has been on a roller-coaster ride this year, affecting an important segment of the Canadian economy. Canadian gold mining interests have been consolidating and concentrating on more accessible deposits.

On Nov. 7, gold touched $1,130.40 an ounce, a four-year low. The high for the year is in the $1,380 range.

But economic uncertainty can move the metal, as investors seek out a safe holding in the face of hesitant global GDP.

On Monday, a decision by Moody’s Investors Service to cut Japan’s credit rating and weak U.S. holiday spending moved bullion above 1,200 US an ounce. On Tuesday, February gold bullion fell $18.70 to close at $1,199.40 US.

For the remainder of the year and into 2015, gold is expected to remain volatile.

That means pressure on the Canadian dollar and on the Toronto stock market, which is heavily weighted to the gold and energy sectors.