Loonie dips below 80 cents U.S., hits lowest level in 6 years
The shift comes as American currency strengthened on belief the U.S. Federal Reserve will hike rates sooner rather than later
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TORONTO—The Canadian dollar continued to lose ground Jan. 29 against American currency, which strengthened on growing conviction the United States Federal Reserve will move to hike rates sooner rather than later.
The loonie shed 0.1 of a cent to 79.77 cents U.S., adding to a three-quarters of a cent slide after the Fed said at the end of its scheduled policy meeting that it would be patient in beginning to hike rates from near zero, where they have been since the 2008 financial collapse. At the same time, it pointed out a string of positives about the American economy, including that economic activity is expanding at a solid pace.
“The Fed leaves all doors open to hiking interest rates as early as June,” said Camilla Sutton, chief FX strategist, managing director Scotiabank Global Banking and Markets.
“However the core theme is that the Fed is data dependent.”
Traders are looking to the release Jan. 30 of the latest economic growth data. Statistics Canada is expected to report that gross domestic product (GDP) rose by 0.1 per cent during the month.
Fourth quarter U.S. GDP data will also be released on Jan. 30.